China bull and commodities guru Jim Rogers says the U.K. is “finished” and urged investors to dump the pound.
His comments come as Prime Minister Gordon Brown ordered a massive bank bailout worth $142 billion. The Economist Intelligence Unit has downgraded its global economic forecast to a 0.9 percent contraction in 2009, the worst since the end of World War II.
“I would urge you to sell any sterling you might have,” Rogers said, reported Bloomberg.
“It’s finished. I hate to say it, but I would not put any money in the U.K.”
The pound is at its weakest against the yen since 1971, the news service reported. Rogers predicts the pound will eventually trade at $1.05 to the U.S. dollar. It recently traded at $1.39.
Pound watchers held out hope for a turnaround but predicted that a recovery for the pound sterling would hinge on economic recovery, likely many months away.
“There are hopes that a change in the U.S. administration will bring about a turnaround in the economy, even though this won't happen overnight,' Marco Annunziata, global chief economist and head of currencies at Unicredit in London, told Thomson Financial.
“The inauguration is crystallizing all expectations that the U.S. economy will be the first to recover from the recession.”
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