Jim Rogers, chairman of Rogers Holdings, said he is buying euros even as he predicts that bailouts for European nations will eventually destroy their single currency.
The Singapore-based investor, who predicted the start of the global commodities rally in 1999, said he bought euros this week and may acquire more because investor sentiment has turned too negative in the short term. It will take 10 to 15 years for the currency to disappear, he said in an interview in Madrid.
“It’s time to go in and take the other side,” Rogers said today. “It got beaten down so much.”
The euro fell almost 11 percent against the dollar in the last three months as European Union nations struggled to contain budget deficits more than triple the bloc’s 3 percent limit. Last month the EU announced a 750 billion-euro ($923 billion) rescue mechanism to stem contagion from Greece as the risk premium on Spanish and Portuguese bonds surged.
“That’s not the way it’s supposed to work,” Rogers said at the Rafael Del Pino Foundation in the Spanish capital. “I don’t think it’s good for Europe, and I don’t think it’s good for the world to bail out people who have failed.”
The euro was down 0.1 percent to $1.2298 as of 11:38 p.m. in Madrid.
The extra yield investors demand to hold Spanish 10-year government bonds rather than the benchmark German bunds touched a euro-era record today of 2.22 percentage points on an intraday basis after Spain’s El Economista newspaper said the International Monetary Fund is coordinating a 250 billion-euro credit line for the country. The EU and IMF denied the report.
Jim Rogers has taught finance at Columbia University’s business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website.