Monday, March 21, 2011

Jim Rogers: “We’re at a moment of truth for the dollar."

From Beacon Equity

“We’re at a moment of truth for the dollar,” Rogers continued. “If the dollar breaks and keeps going down now . . . there’s a lot of good news for the dollar: the Middle East is erupting–supposed good news for the dollar. All of these people are supposed to be fleeing to the U.S. dollar as a currency for safety. But it’s not happening. When you start seeing good news for something and it goes down, it’s usually a good sign that you better get out fast.”

The dollar’s next move is critical, he said, as a break down to near the all-time lows for the currency at approximately 71 on the USDX achieved just prior to the Bear Stearns meltdown of March 2008 will turn him into a seller of the dollar.

“If it [dollar] keeps going down, I’m going to have to dump the rest of my dollars, and then it’s all over for the dollar.”

However, if the Greenback stops sliding from its present 75.60 level on the USDX, Rogers will consider buying dollars again for what he sees could be another significant rally.

“I am thinking about buying it [dollar], because if it doesn’t keep going down, then it’s going to have a big rally,” he offered. “If it holds here, it probably could go up 10% or 12%–no, maybe 20%.”

But on the downside, Rogers put the dollar on a short leash, “If it goes down 3% or 4% from here, I would have to sell and get out and hope I’m still solvent. Then it’s going to, you know, multi-decade new lows.”

“Somewhere along the line we’re going to have a tipping point for the dollar, then, it’s all over,” he concluded. “I thought it would happen in a few years; maybe it’s going to happen in a few weeks.”

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