Investors should dump the dollar and put their money into commodities, says billionaire investor Jim Rogers.
The greenback will get even weaker as inflation inevitably rises, which will prompt the government to sell bonds and print money to pay down gaping deficits, Rogers says.
“The U.S. dollar is now a terribly flawed currency,” the Australian Broadcasting Corporation quoted Rogers.
“The U.S. as recently as 1987 was a creditor nation. Now it's the largest debtor nation in the history of the world and that's going to continue to cause problems.”
Investors should put their money in commodities, especially since demand for commodities like oil and gold will outstrip supply, thus boosting prices, Rogers says.
Federal Reserve officials have said they will keep an eye on inflation when the time comes to yank stimulus money out of the economy once recovery gains steam.
Currently, U.S. exports are rising amid a global recovery and a weak dollar, while the housing and automobile sectors are no longer dragging economic growth, says Jeffrey Lacker, president of the Federal Reserve Bank of Richmond.
Nevertheless, unemployment rates and a sagging commercial real estate sector present hurdles to sustained recovery, yet the Fed will move against inflation and do it early on.
“I will be looking for the time at which economic growth is strong enough and well-established enough, even if it is not yet especially vigorous,” says Lacker, according to Reuters.
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