Tuesday, February 23, 2016

Japanese who held cash in Yen terms have lost a lot of money via currency devaluations

Well, if you’re going to buy bonds, you should certainly buy high quality, which is mainly government, but you should only buy short term bonds. I wouldn’t buy 30 year bonds with his money or your money for that matter, because unless you’re a good trader, we’re going to see much, much, much higher interest rates eventually. We’ll probably see lower interest rates first, which will benefit the high quality bonds. But from his point of view, or from many people’s point, there’s not much else you can buy. 

You can put your money in currencies or cash, but you got to have the right cash or you’ll lose a lot; a lot of smart Japanese put all of their money in yen three or four years ago, and now it’s down 50 percent in that period of time. So you have to be careful what to buy, and certainly government bonds have been, and they continue to be, one of the things that you could buy. But buy the right government and the right currency as well, if you buy government bonds.

Jim Rogers is a smart investor who co-founded the Quantum Fund with George Soros in 1973. By 1983 the fund gained more than 4000 percent.