Jim Rogers talked about US dollars while he was attending the China International Financial Services Conference (CIFSC) held in Guangzhou on September 10, 2009.
Rogers believes that the last 50 years is U.S. government's journey into a huge debt and the U.S. government's decision-makers are still repeating this mistake.
Measures taken by countries to rescue the economy is continuously printing banknotes, which will lead to inflation (except energy prices), and this process will not be interrupted unless there are more banks close down.
Europe and the United States government have fallen into the vicious cycle of "issue bonds - inflation - issue more bonds – inflation again". I will not buy more United States Treasury bonds because the government is constantly printing more banknotes. The world will never be a lack of U.S. dollars. I will buy oil, minerals and stock of those companies which are engaged in the real economy.
US dollar economy has encountered major problems, the dollar index fell to a new low, and it will continue to fall. If the dollar rebounds in the future, I will sell all the U.S. dollars. My whole family has moved to live in Asia. The story of the United States is over. A new story belongs to China.
With regard to the U.S. Treasury bonds, Rogers thinks that both the U.S. bond market bubble and the crisis are growing. He could not tell when and how the bubble will burst, but he thinks lending money to creditors for 30 years and only takes 3% to 4% annual interest rate is a very unreasonable. In the short term, because there are more people to buy U.S. Treasury bonds, interest rates will be cut for a short time, but on the long run interest rates will surely rise. Therefore, China should further expand the U.S. Treasury holdings, or else China will suffer losses.
By People's Daily Online