Jim rogers is long the Euro, still sees gold at US$2,000
Source: BI-ME , Author: BI-ME staff
Posted: Mon March 8, 2010 6:54 pm

INTERNATIONAL. Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers said he is long the Euro because 'whenever there’s been a huge short position in anything, it’s sometimes profitable to go to the other side.'

Speaking to Betty Liu in a Bloomberg interview Monday, Rogers said bankruptcy for Greece would benefit the euro. "The Euro will shoot through the roof," he said adding that letting Greece fail" will show that EU are serious about fiscal responsibility."

Asked about his wager with Nouriel Roubini that the gold price will reach at least US$2,000 in the next decade, Rogers responded that he will let the market play out, and that “I happen to own gold expecting it to go that high.”

In a Wallstcheatsheet.com interview with Damien Hoffman, Rogers expanded his stance saying " I’m long the Euro because I expect them to come through this one okay.

"Either Greece is going to be papered over and they’ll give a blast to the Euro, or they’re going to let Greece go bankrupt. In my view, this is what they should do because then people would say, Wow. They’re serious about sound economies in Europe,” Rogers said.

"That would make the Euro very strong. Then people would know they are not just going to print money or paper over failure." he added.

"Either way, I think there’s probably a rally coming. There’s a huge short position in the Euro and whenever there’s been a huge short position in anything, it’s sometimes profitable to go to the other side. So, I am long the Euro because I think there are too many pessimists."

Rogers does not think Greece will be the only European coubtry to suffer. "I would suspect that the UK is more likely to suffer before Greece, but who knows. Maybe it’s time for all of them to collapse and come down together, he told Hoffman.

“Europe and America must say ‘enough is enough’ to those speculators who only place value on immediate returns, with utter disregard for the consequences on the larger economic system,” Greek Prime Minister George Papandreou said in a speech today in Washington.

“An ongoing euro crisis could cause a domino effect, driving up borrowing costs for other countries with large deficits and causing volatility in bond and currency rates across the world.”

Papandreou and other leaders such as German Chancellor Angela Merkel have blamed much of the surge in Greek financing costs on market speculation, rather than its inability to tame the region’s biggest budget deficit.

The only way to build an economy long term is to save and invest while building infrastructure and productivity. Nothing else has ever worked, Rogers said, adding  that the idea of economies built on consumerism has been discredited many times.

The future has always belonged to the people who’ve got the assets — the people who’ve built up savings and investing.

 

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