Jim Rogers is right when he says the dollar is in serious danger, but he’s early — four years early, says Cantor Fitzgerald CEO Howard Lutnick says.
“When the U.S. economy starts to pump and grow, which isn’t going to happen until 2014 or 2015, then you’ve got serious inflationary bite,” Lutnick told CNBC.
Lutnick says double-dip recession means Treasuries — and the dollar—will be in demand over next two to three years.
“People are saying, ‘The Chinese are going to quit buying,” Lutnick says.
“And they’re going to buy … what?”
Lutnick believes that economic stresses coming in 2011 and 2012 caused by the commercial real estate market falling apart and leveraged buyouts coming due will constrain inflation for a while.
“I think we’re going to grow for a while,” he says. “And then I’m going to join Jim Rogers’ side and say inflation’s coming.”
Rogers, meanwhile, remains convinced that Fed actions, policy, and government borrowing intended to stem this crisis spell doom for the U.S. dollar.
The rise in Treasuries indicates “crazy inflation coming and gigantic debt, which the U.S. government is going to have to sell,” Rogers told CNBC.
“I’d rather short bonds than short stocks for the foreseeable future.”
“I’m afraid they’re printing so much money that stocks could go to 20,000 or 30,000,” Rogers says. “And I expect there will be a currency crisis later this year or maybe early next.”
The U.S. dollar “is a terribly flawed currency,” Rogers notes.
“Somewhere along the line somebody is going to say, ‘I’m going to start selling mine before everybody else does, and there’s your crisis.’”
This time the crisis will be major currencies, and “it will be widespread,” Rogers says, adding that the fundamentals are getting worse for virtually everything except commodities.
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