Joined: 17 Jul 2006
|Posted: Fri Nov 10, 2006 7:15 am Post subject: Jim Rogers: Euro will disappear in 15-20 years
|Jim Rogers: Euro will disappear in 15-20 years
The euro will disappear within 20 years because of the inability of member states to stick to the rules underpinning the European Union's single currency, prominent U.S. investor Jim Rogers predicted.
“The euro is not going to survive in my view,” Rogers said in an interview with Reuters in Seoul. “I own the euro, but I don't expect it to be around in 15 to 20 years,” he added.
Rogers, co-founder of the Quantum Fund with George Soros, called the currency used by 12 EU countries a “political” currency, not an economic one. This, he said, would be its undoing.
“Most of the members are not abiding by the terms of the Maastricht Treaty ... Everybody is either changing the rules, or ignoring the rules, or fudging the rules,” he said, referring to the 1992 treaty that led to the creation of the euro.
The U.S. investor, known for his bullish stance on commodities, also pointed to history to back his prediction.
“No currency union has ever survived in history. No free trade pact has survived in history,” he said.
Rogers was in Seoul to give a speech at the Korea Exchange Global Investor Forum.
He stuck to his bearish view on the dollar and even predicted that its days as the world's reserve currency might be numbered.
China's yuan could potentially grow into the world's reserve currency, but only if it becomes freely convertible and if China opens its economy more widely.
“It does have the size and the liquidity and the size of the economy, potentially,” Rogers said, adding that it was the only currency with the chance of supplanting the dollar within 10 to 15 years.
In a wide-ranging interview, Rogers said the United States was headed for a deep recession because of weakness in the housing market and the large debts it has incurred.
“The U.S. is unbelievably leveraged, over-extended financially and economically, so eventually we are bound to have a serious economic setback,” he said.
Rogers urged investors to switch into agricultural products such as wheat or cotton to take advantage of what he sees as the next leg in an unfolding commodities boom. Prices were historically low and supply was failing to catch up with demand.
“If I were looking for new investments in commodities today, I would be looking at agriculture,” he said.