US Dollar May Go Past 100 Against Most Currencies, May Turn Into a Bubble in 1-2 years: Jim Rogers

In an interview with ET Now, Jim Rogers, commodity expert, shares his views on the currency market. Edited excerpts:

ET Now: What is your sense on the US dollar versus most currencies? Where do you see the currency market headed towards?

Jim Rogers: I own the US dollar. It is my largest single currency. I do not have any confidence in the US dollar as a sound currency. It is one of the most flawed currencies in the world. US is the largest debtor nation in world history and it is getting even worse. I own it because there is more turmoil coming in the world and in such times, people seek a safe haven. Hot Commodities: How A... Rogers, Jim Best Price: $1.25 Buy New $8.95 (as of 01:40 UTC - Details)

The US dollar is not a safe haven but people think it is, and they do not know what else to do. In any case, they are not going to go to the Yen or Euro. It is going to go higher as more turmoil comes in. It might even turn into a bubble because people get desperate. So, I am not selling US dollars. If it turns into a bubble, I will obviously have to sell my US dollars.

ET Now: Do you see the US dollar coming to 100 mark yet again and would you see that as a function of the US Fed raising interest rates?

First Alert 2096DF Wat... Buy New $494.34 (as of 10:46 UTC - Details) Jim Rogers: US rates will go higher, there is no question about that. But the only question is when it will happen. After rate hike, the US will attract more money. Part of the turmoil will come from interest rates going higher. Of course, the US dollar will go over a 100, but my fear is that a year or two from now, the US dollar could literally turn into a bubble because people do not know what else to do with their money and there is turmoil everywhere. You are not going to put it in the rupee. One can invest it in yen if the Chinese renminbi gets convertible by then, but, otherwise, people do not have much choice going forward and so the US dollar is going to go much higher.

ET Now: If you look at that as a background, the Indian rupee seems to be catching up with the decline in other Asian currencies. How much do you see the rupee sliding from here on?

Jim Rogers: I know it is going to continue to go down. The Indian government has not done very much in the last year to revive the Indian economy. India is a debtor nation, so people are now waking up to the problems that exist in the world and in India. That is why more money is fleeing to the US dollar. 7700 Flat Electronic W... Buy New $77.49 (as of 01:20 UTC - Details)

ET Now: What is your sense coming in for the gold prices? They have been weakening, unable to move above $1200 per ounce. Even with the Greece concerns and bouts of weakness in the US dollar, gold has not been able to make use of that?

Jim Rogers: I own gold. I have not bought any serious gold in five years or so. It did not have a down year for 12 years, now the correction is an anomaly. Gold has not been down 50% in years, so gold has not been acting like normal markets for a long time. I expect a better chance to buy gold sometime in the next year or two. If that happens, I hope I am smart enough to buy a lot more gold if it had a 50% Specialty Products 300... Buy New $16.91 (as of 12:50 UTC - Details) correction. I will hedge some of my gold because there are still too many people who believe that gold is holy and it probably cannot set a sound bottom.

ET Now: The OPEC meeting in the previous week has left the stand on oil output unchanged. How do you see that impacting the supply situation? OPEC also said that the current demand trend is healthy, price is fair. How would you react to all of that?

Jim Rogers: There is no question if demand is healthy, prices go down a lot. Whenever a market sees a big collapse, it comes up with a bounce. In America, we sometimes call it a dead-cat bounce. So, I would suspect that oil, for whatever reason in the next few days or weeks or months, would test the low again. If that low will probably hold, then at that point, we will be going back into higher oil prices after it tests the low successfully.

ET Now: Your sense on the crude oil prices going ahead from here?

Jim Rogers: They will probably go back and test a low. The low was in the 40s before, so let us say it goes back into the 40s, it will go higher depending on world situation.

ET Now: How are you looking at the base metal sector because that has not had any support from China or Europe and sense of economic data, do you see further sluggishness for this sector?

Jim Rogers: By sluggishness if you mean sideways movement, it may have the sideways movement for a while but I would be buying base Check Amazon for Pricing. metals, especially tin, lead, zinc, rather than selling them.

ET Now: The food prices have been on a rise for the last two months. Do you see food inflation as a big concern now coming in for India?

Jim Rogers: Food inflation is going to be a concern for everybody and India. It looks as though we are going to have even more serious weather problems in the world, not just in India. So, I would be concerned about food inflation and food prices worldwide, including India.

ET Now: Agri commodities worldwide have been volatile and there is an inflation concern across. How would you look at that sector and especially some of these agriculture commodities like sugar, cotton, corn?

Jim Rogers: It depends on the currency against which one measures these commodities. If you are measuring in US dollars, it is down but if you are measuring in other currencies, the ringgit for instance, sugar is up. I am optimistic about agriculture going forward. It seems we are going to have strange weather this year and may be next year as well, so I would certainly not be selling agriculture. If anything, I would be buying.

Reprinted from The Economic Times.