Jim Rogers: "We're at a moment of truth for the dollar"

[jct74]

Internationally renowned investor Jim Rogers told "Breakout" hosts Matt Nesto and Jeff Macke that he's considering buying the U.S. dollar now, but with a catch.

"We're at a moment of truth for the dollar," he says.

Rogers, who is currently long the yen, notes that the dollar has been declining despite events that would normally trigger a global flight to safety.

He says that if the dollar holds here it could rally as much as 20%, but "if it goes down 3% or 4% from here, I would have to sell and get out and hope I'm still solvent."

Rogers sees a decline in the dollar to historic "multi-multi decade new lows" as a long-term inevitability, but says the time frame for a collapse in the greenback may be sooner than previously thought.

"Somewhere along the line we're going to have a tipping point for the dollar, then it's all over," he offered. "I thought it would happen in a few years; maybe it's going to happen in a few weeks."

http://finance.yahoo.com/blogs/dail...ers-may-buy-u-dollar-20110317-072912-837.html

 

[cubical]

So true. Dollar has not been the flight to safety so much this go around. Bonds have gotten a brief bid though. Tides are changing though.

 

[YumYum]

According to Griffin, there is always a deflationary period before hyper-inflation.

 

[sevin]

"Somewhere along the line we're going to have a tipping point for the dollar, then it's all over," he offered. "I thought it would happen in a few years; maybe it's going to happen in a few weeks."

Uh oh.

 

[cubical]

According to Griffin, there is always a deflationary period before hyper-inflation.

There could be, but in what assets?

 

[YumYum]

There could be, but in what assets?

According to Griffin, the currency itself will deflate through wage and price controls, contracting credit and higher interest rates. He says its a last ditch effort by a government to save its money. Schiff also predicts in "Crash Proof" that just before hyper-inflation takes off there will be a bond bubble due to the government/Fed buying up bonds to create a demand for treasuries, which artificially and temporarily strengthens the dollar. When the bubble "pops", its all over.

 

[cubical]

According to Griffin, the currency itself will deflate through wage and price controls, contracting credit and higher interest rates. He says its a last ditch effort by a government to save its money. Schiff also predicts in "Crash Proof" that just before hyper-inflation takes off there will be a bond bubble due to the government/Fed buying up bonds to create a demand for treasuries, which artificially and temporarily strengthens the dollar. When the bubble "pops", its all over.

Schiff has been saying we are already in a bond bubble. So the treasury demand part could be playing our right now, just slowly. The dollar did not really gain much strength over the last several months, and especially weak now. If there is another round of QE, yes there will be treasury demand, but it would certainly not be a positive for the dollar's value.

If the government all of a sudden spent only what it is taking in and no longer needs to sell bonds, and the fed starts to sell treasuries slowly, then I could see a massive dollar rally. I don't know how this situation would actually play out. Seems to be a lot of variables with this scenario.

I do think that there will be a downturn in the market once inflation issues become mainstream, but if inflation ever went hyper, of course there would be rising prices in every asset class.

 

[anaconda]

According to Griffin, the currency itself will deflate through wage and price controls, contracting credit and higher interest rates. He says its a last ditch effort by a government to save its money. Schiff also predicts in "Crash Proof" that just before hyper-inflation takes off there will be a bond bubble due to the government/Fed buying up bonds to create a demand for treasuries, which artificially and temporarily strengthens the dollar. When the bubble "pops", its all over.

How will the treasury roll over its debt if the Fed hoards t-bills?

 

[ctiger2]

According to Griffin, there is always a deflationary period before hyper-inflation.

We have massive deflation occurring right now, and we have a massive inflation of the money supply fighting it.

 

[Stary Hickory]

Don't confuse yourselves, Deflation and inflation are basically the same thing. Just fraud working itself out, deflation being the natural unwinding of an inflationary boom and stagflation/inflation being further intervention to push what would have been deflationary losses back on holders of the dollar.

 

[emazur]

Uh oh.

Don't panic. He said 2 years ago that the British pound was "finished"
http://www.independent.co.uk/news/b...ling-you-might-have-its-finished-1452384.html

 

[anaconda]

Don't confuse yourselves, Deflation and inflation are basically the same thing. Just fraud working itself out, deflation being the natural unwinding of an inflationary boom and stagflation/inflation being further intervention to push what would have been deflationary losses back on holders of the dollar.

It is my understanding that, theoretically, inflation in a stagflation situation could happen with no change in the money supply. And would have nothing to do with fraud.

 

[eduardo89]

Don't panic. He said 2 years ago that the British pound was "finished"
http://www.independent.co.uk/news/b...ling-you-might-have-its-finished-1452384.html

It really did seem that way and probably would have happen if Labour had been reelected

 

[Legend1104]

Funny how when he says the dollar is basically done, the interviewers are like, "right, ok anyway..."

 

[denison]

what are they suppose to do, start crying? i'm sure their investment portfolios show how they really feel.

 

[denison]

Don't panic. He said 2 years ago that the British pound was "finished"
http://www.independent.co.uk/news/b...ling-you-might-have-its-finished-1452384.html

the dollar has way more debt obligations then the pound.

whether it happen in a few week or years, it's gonna happen. be pissed at the FED, not the pundits.

 

[jct74]

Well, dollar index was at least 76 when he said this. Its tanking tonight, now at 73.75 (down 3% since from the 76 mark).
http://www.bloomberg.com/apps/quote?ticker=DXY:IND

Not looking good for the dollar.

 

[Indy Vidual]

Made it down to 73.743
then bounced to 73.754

 

[tpreitzel]

Indeed, and nearly everyone knows it except for American Idol, Dancing with the Stars, and Lady Gaga acolytes.