Tags: Rogers | Russia | Ruble | invest

Jim Rogers to Moneynews: Now's the Time to Invest in Russia and the Ruble

By Forrest Jones and Kathleen Walter   |   Thursday, 27 Sep 2012 02:05 PM

Russia and its currency represent very attractive investment venues, and investors looking to get in early should consider doing so now, says international investor Jim Rogers.

Political stability and a large economy make Russia a rising star.

"I am looking at Russia for the first time in my life, contemplating buying Russia. I am even looking at the ruble," Rogers told Newsmax.TV in an exclusive interview.

Watch our exclusive video. Story continues below.

While he hasn't moved into Russia yet, Rogers said the investment environment has been making notable improvements under President Vladimir Putin.

"Russia has a freely convertible currency, despite what people may think. Secondly, the Russians have been playing the wrong game for 95 years now. They kept promising that if you put your money in Russia, everything will be OK and we will protect you. But of course, they take it away from you or whatever," Roger said.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

"Mr. Putin seems to be changing his attitude toward outside investors and toward inside investors, for that matter. He seems to be understanding that you can't just take money away from people, you can't just throw people in jail," Rogers added.

"He seems to be changing and if that is the case, and I am convinced it is, there are going to be pretty great opportunities in Russia, a staggeringly big country, lots of assets — it could be a great, great story."

Rogers adds that he owns the U.S. dollar due to the sheer demand for the currency, as investors in search of safe harbor are snapping it up due to its liquidity and not necessarily because of U.S. economic fundamentals.

The official Chinese currency, the renminbi, is a good buy as well though buying into China can be difficult at times.

Other currencies worth mentioning include the Hong Kong dollar and the Swiss franc since they are pegged to the U.S. dollar and euro respectively, meaning if things turn south in Brussels or Washington, monetary authorities in Hong Kong and Switzerland can tweak with their exchange rates to protect the currencies' values.

Stay away from stocks now that the Federal Reserve has made it official that a third round of quantitative easing is under way.

The Fed recently announced plans to pump liquidity into the U.S. financial system via buying $40 billion in mortgage-backed securities from banks a month on an open-ended basis, a monetary policy tool known as quantitative easing that aims to speed up recovery.

The European Central Bank, the Bank of England and the Bank of Japan have announce similar measures, while the People's Bank of China has said it will consider cutting interest rates and banking reserve requirements.

Stock prices tend to rise when central banks act, though that trade may be a done deal, especially now that the Fed's third round of quantitative easing has begun.

"Normally what the market does is it rallies in anticipation of good news, and then when the good news comes it does something else. So I would suspect we are not going to have much strength for a while."

Often dubbed as printing money out of thin air, quantitative easing functions by lowering interest rates across the economy when cuts to benchmark lending rate targets don't work on their own.

As a result, currencies weaken and inflationary pressures rise, especially since the Fed isn't the only monetary authority juicing its economy.

"The central bank in Europe is getting in the party — everybody is in the party. The Chinese are not quite so much in the party as they were before but the three big central banks, the Japanese, the European and the Americans are all in the game and printing."

Commodities, meanwhile, remain the way to go under such ultra-loose policies.

"Either the world economy is going to get better and commodities are going to go up because of shortages, or they are going to print more money, and throughout history when they printed a lot of money, you protect yourself by owning real assets."

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

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