Friday, January 6, 2012

Jim Rogers Next 3 Years

International investor Jim Rogers says he is short emerging markets and he isn't "too optimistic" about the immediate future.
“I’m not too optimistic about what’s going to be happening in the world in the next two or three years, and maybe even longer,” Rogers tells the Finance News Network.

“If the world economy doesn’t get better, you’re not going to make money in stocks,” says Rogers. “But then central banks will print more money and when they print money the thing to do is to own real assets.”

“I’m short stocks around the world, I’m short American technology stocks, I’m short emerging market stocks and I’m short European stocks,” Rogers told Finance News Network.

Global economic problems are going to continue to get worse until somebody solves the basic underlying problem of too much spending and too much debt, says Rogers, adding that the biggest risk is the Federal Reserve, which keeps printing money.

“But they’re printing all that money as a result of the debt,” says Rogers.

“The Central Bank keeps buying government debt and the Congress keeps spending government money.”

Failing to address this problem could easily lead to riots in the streets, even war, Rogers says. “It’s better to go ahead and take the pain now, while it would be terrible for two or three or four years, at least we’d get it behind us and start over,” he says.

Jim Rogers advocates a strong currency but Japan wants a weaker yen(CYB, FXY ... - NASDAQ

Legendary investor Jim Rogers once declared that a weak currency is evidence of a weak economy, which is evidence of a weak government. Japan is all for a strong currency -- for China.
In an article in The Wall Street Journal
by Lingling Wei, Bob Davis and Takashi Nakamichi, it was reported that, "A wide-ranging currency agreement struck this weekend between China and Japan is expected to give the Chinese yuan a more powrful role in international trade, but substantial barriers remain before the yuan can emerge as a currency powerhouse."
As detailed in previous articles on , the yuan ( CYB , quote
) is becoming more accepted in international commerce.  This will eventually raise its value, due to basic supply and demand matters.
The Wall Street Journal
article, "Tokyo signals support for yuan," noted that China and Japan will now trade in yuan/yen transactions, without having to convert to a U.S. dollar first.

In addition, Japan will now hold the yuan in its foreign reserves, which now consists mainly of the US dollar.
The stronger the yuan becomes, the better for Japanese exporters who sell in foreign currency but add up their book in yen.
Global giants like Toyota Motors. Canon Inc, are suffering from having to sell internationally under a more costly currency regime.
A stronger yuan also means Chinese exports are much less competitive against those from Japan as Japanese exports to China become that much more of a bargain for consumers.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.