US Headed For Worst Recession In A While: Jim Rogers

Source : The Business Times, January 9, 2008

(LONDON) The US economy is heading for a recession that may be the worst 'in a while' and investors should sell the dollar as global currencies weaken, investor Jim Rogers said.

'It's going to be one of the worst recessions we've had in a while because we had so many excesses going into it,' Mr Rogers, chairman of New York-based Rogers Holdings, said in a Bloomberg Television interview on Monday from Singapore.

'It's going to be bad for all of us as currencies come under more and more stress and we have more inflation in the world,' he said.

The US and UK governments have been 'lying' about inflation, Mr Rogers said, adding that he is selling their respective currencies.

The dollar dropped for a second straight year in 2007, falling 8.3 per cent on a trade-weighted basis as the collapse of the US sub-prime mortgage market prompted the US Federal Reserve to cut interest rates three times. Rising energy and food prices have pushed up inflation in Europe.

'I hope by the end of this year all of my assets will be out of the US dollar,' Mr Rogers said. 'The dollar is a currency that's terribly flawed and it's going to be under duress for many years to come.'

Mr Rogers said in a Nov 15 interview that investors should sell the dollar and that he expects to be rid of all his US currency assets this year. He reiterated that he is also buying the Chinese yuan and the Swiss franc as other currencies weaken.

Mr Rogers, who has been a commodity bull since 1999, said that agriculture may be the best investment among commodities in the event of a world recession.

'If you're worried about a recession, you might think about buying agricultural commodities,' Mr Rogers said. 'I suspect agriculture is going to do well no matter what happens to the world economy.'

Cotton, coffee and sugar may gain the most, he said, adding that he wouldn't buy crude oil after prices rose above US$100 a barrel last week, or industrial metals such as tin or lead because a slowing US economy would curb demand.

Mr Rogers said commodities will gain even if the dollar declines, because of supply shortages.

'All commodities are going to be in much shorter supply for another decade,' he said. 'So even if the dollar goes up, commodities are going to go higher.' - Bloomberg