El Justo Reclamo

Rogers Says U.S. to Have Worst Recession `in a While'

By Saijel Kishan and Mark Barton

Jan. 7 (Bloomberg) -- The U.S. economy is heading for a recession that will be the worst ``in a while'' and investors should sell the dollar as global currencies weaken, investor Jim Rogers said.

``It's going to be one of the worst recessions we've had in a while because we had so many excesses going into it,'' Rogers, chairman of New York-based Rogers Holdings, said in a Bloomberg Television interview today from Singapore. ``It's going to be bad for all of us as currencies come under more and more stress and we have more inflation in the world.''
The U.S. and U.K. governments have been ``lying'' about inflation, Rogers said, adding that he's has been selling their respective currencies.
The dollar dropped for a second straight year in 2007, falling 8.3 percent on a trade-weighted basis as the collapse of the U.S. subprime-mortgage market prompted the Federal Reserve to cut interest rates three times. Rising energy and food prices have pushed up inflation in the U.S. and Europe.
``I hope by the end of this year all of my assets will be out of the U.S. dollar,'' Rogers said. ``The dollar is a currency that's terribly flawed and it's going to be under duress for many years to come.''
Rogers said in a Nov. 15 interview that investors should sell the dollar and that he expects to be rid of all his U.S. currency assets this year. He reiterated today that he's also buying the Chinese yuan and the Swiss franc as other currencies weaken. Agricultural Commodities
Rogers, whose commodities index has more than quadrupled since 1998 when it was started, said that agriculture may be the best investment among commodities in the event of a world recession.
``If you're worried about a recession, you might think about buying agricultural commodities,'' Rogers said. ``I suspect agriculture is going to do well no matter what happens to the world economy.''
A decline in crop yields because of droughts from Ukraine to Australia, combined with rising demand for biofuels, has spurred a rally in agricultural commodities that sent wheat to a record last month and corn and soybeans to multi-year highs.
Cotton, coffee and sugar may gain the most, he said, adding that he wouldn't buy crude oil after prices rose above $100 a barrel last week, or industrial metals such as tin or lead because a slowing U.S. economy would curb demand.
Commodities are in their seventh year of gains because of a lack of investment in production capacity and rising demand from expanding economies in Asia. They have also gained as the U.S. dollar fell, making resources such as oil and wheat, which are denominated in the U.S. currency, cheaper for foreign buyers.
Rogers said commodities will gain even if the dollar declines, because of supply shortages.
``All commodities are going to be in much shorter supply for another decade,'' he said. ``So even if the dollar goes up, commodities are going to go higher.''

To contact the reporters on this story: Mark Barton in London at barton1@bloomberg.net ; Saijel Kishan in London at skishan@bloomberg.net