Jim Rogers, finance guru and bestselling author of “Hot Commodities,” owns the United States dollar but he has zero confidence in the greenback because it is deeply flawed.
Speaking in an interview with the Economic Times, the renowned investor warned the U.S. will eventually turn into a bubble and then burst in a few years, which will create “turmoil everywhere” following a hike in interest rates.
Rogers noted that the U.S. is his largest single currency. Even though he doesn’t have any confidence in the currency, and thinks it’s “one of the most flawed currencies in the world,” he only owns it because he expects “more turmoil coming in the world.”
“The U.S. is the largest debtor nation in world history and it is getting even worse. I own it because there is more turmoil coming in the world and in such times, people seek a safe haven,” he said. “The U.S. dollar is not a safe haven but people think it is, and they do not know what else to do. It might even turn into a bubble because people get desperate.”
The future of the dollar is bleak, according to Rogers.
“U.S. rates will go higher, there is no question about that. But the only question is when it will happen. After rate hike, part of the turmoil will come from interest rates going higher,” he added. “My fear is that a year or two from now, the U.S. dollar could literally turn into a bubble because people do not know what else to do with their money and there is turmoil everywhere.”
Interest rates are expected to be increased in September, and many economists think two rate hikes will transpire this year. Although many international organizations, like the IMF and World Bank, have urged Federal Reserve Chair Janet Yellen to delay any rate hike until next year, the U.S. central bank seems certain it’ll raise rates. Of course, it’ll likely be minuscule.
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