Jim Rogers was recently interviewed by Business Standard. Below are the transcripts.
Can the euro zone disintegrate over the next five years?
I think it will certainly change from what it is now. It could
disintegrate, but I hope it doesn’t. The world needs something to
compete with the US dollar. A sound euro will be a good thing, if they
can make it a better currency.
What lies ahead for Greece? Do you think this could set a bad precedent for other indebted countries in the euro zone?
Well, that’s one reason you have the Euro Zone/EU (European Union) refusing to give in. If they give in to Greece, they will have to give in to other people as well; they cannot afford that. That is why they are being so tough with Greece. They should be tough, otherwise the contagion will spread to the whole world. The world cannot afford this. So, continuing to be tough with Greece is a good thing.
Problems with Greece have been going on for five years and it is perhaps higher now than it was before. They still spend huge amounts of money on pensions and government employees. So Greece hasn’t really had serious austerity yet.
You had also said that the US dollar could cross the 100 mark against most global currencies. Do you still hold this view?
Well, it still can go past the 100 mark against most currencies but it may turn into a bubble. Once we have more currency turmoil, many people will flee to the US dollar and because they do not know what else to do. They think it is a safe haven. It is not a safe haven. It is not a prediction but this can happen.
Do you think the US dollar could probably lose its tag of a safe-haven currency over the next five years? Which currency, in your opinion, could replace it?
That will happen, but it will take longer than five years. One reason why it will take longer than five years is that the only currency I see seriously coming close is the Renminbi, but the Chinese currency isn’t even convertible yet. So, it is impossible to see it replacing the US dollar at the moment.
What is your outlook for gold and crude oil?
I own gold and I am not buying gold right now. If it goes down, I will buy more. As for oil, the way most markets work, they have a big drop and collapse followed by a rebound. It is sometimes called a ‘dead-cat bounce’, and then it goes back to test the bottom again. I suspect crude oil will test the lows and pass this test, but in the meantime, I am not buying oil. I am waiting to see the oil test lows again.