Investment guru Jim Rogers is selling all of his U.S. dollar holdings as he believes there has been an "artificial" rally in the currency of late and this is the right time to get into other investments.
The chairman of Rogers Holdings said the dollar is having a "big rally" this year, but that this is because investors have been shuttled into a period of "forced liquidation.”
“People are reversing their positions in everything. There have been a lot of bears on the dollar. They have all been short on the dollar. Now they have to cover their positions," Rogers said during an interview with Bloomberg TV.
"There's been an artificial rally on the dollar."
Rogers reasons that the dollar is where the British pound was some time ago — at the beginning of its long-term decline as the world's preferred currency.
"I hate to say this, as an American, but I am going to sell all of my dollars in the next days, weeks and months," said Rogers. "I am using this rally to get out. The dollar is going to go the way of the pound sterling."
The dollar today not as strong as it once was when compared to the Euro or the Yen, Rogers said.
"The dollar may be a doomed currency in our lifetimes," said Rogers. "I don't like saying it."
Like the pound, the value of the dollar may decline by up to 90 percent in the coming years, said Rogers.
Given his gloomy outlook on the dollar, it's not surprising that Rogers also has a negative view of U.S. equities.
"The fundamentals for Citigroup are impaired," said Rogers. "The fundamentals for GM are impaired."
Rogers is putting is money in commodities, because the "fundamentals for commodities are not impaired."
He's also eyeing shares in Chinese companies and in Taiwanese companies, countries that do not have structural problems with financing consumer and business growth in their respective economies.
"These are the places for times like these," said Rogers. "I'm worried about the U.S. economy — supply going down faster than demand."
Structural problems with the U.S. economy that need to be reformed before stability returns, say some.
"We did see early on that there was a potential crisis with Fannie Mae and Freddie Mac," outgoing Vice President Dick Cheney said yesterday in a radio interview.
“Alan Greenspan warned us about this. We put together a reform package. The Congress wouldn't touch it. The Democrats on the Banking Committee wouldn't touch it. Those securitized instruments issued by Fannie and Freddie are held by firms all over the world. This has global consequences."
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