Jim Rogers, author of “A Bull in China: Investing Profitably in the World’s Greatest Market” and a renowned investor who co-founded the first global investment fund with George Soros in 1973, has made numerous extraordinary predictions about trade market in the past, including the fall of the US dollar.
He last predicted the crash of U.S. real estate in 2006 before the subprime crisis happened in 2007. As a pioneer of investment in China’s shares in the 90’s, Rogers has an extensive understanding of the red dragon economy and believes some Chinese industries have a rich future ahead.
Rogers owns Chinese fintech companies like Beijing-based Tiger Broker and feels there are abundant possibilities in Chinese stocks. His favorite are those backed by the Chinese government like pollution clean-up when it comes to water, air, and soil; agriculture; and healthcare.
He predicts Chinese tourism will increase exponentially over the next ten to 20 years, as the country’s citizens have a stronger purchasing power to spend overseas.
When questioned about the likelihood of Fed hikes that may affect the world economy, his answer was that other central banks would have to follow suit and take their interest rates higher.
“Interest rates have never been like this in the history of the world,” he said. “Central banks do not know what is happening and it is their experiment at best. The world’s debts will increase as a result of the interest rates going higher.”
He believes that although China’s financial markets have not been performing lately, China will be leading the race when it comes time for the bull market.
His position, he says, is because the US dollar is “getting worse and worse.” Although he admits to still owning American currency, Rogers stated that, “In the next few years the American dollar is going to lose its position as the world’s reserve currency and the world’s medium of exchange.” He added that the world has moved away from dominant currencies throughout history.
“They all had that position at one time or another but then went to excess and are not that sound anymore, they lost their position. People don’t like Washington’s power, so they are moving away and finding ways to get away from the dollar. It has happened throughout history, it happened to the pound sterling, you know the rest of that story,” he said.
He praised Turkey and Russia as countries that are starting to trade with each other in their own currencies. “Everybody is now trying to get rid of the US dollar,” Rogers said.
The possible currency that could replace the greenback is China’s renminbi, he said, but that it would be “impossible for a while” because it is not convertible yet. He added that the world could have a few regional currencies for some time, but that there is no point in having more than one dominant currency.
Rogers currently lives in Singapore and runs Rogers Holding and Beeland Interests Inc.