Jim Rogers Warns On Stocks And Calls End To USD Rally

On Bloomberg: Dollar Rally Will End, Rogers Says; May Short Stocks

• By Chen Shiyin and Haslinda Amin
  
  May 12 (Bloomberg) -- The dollar’s rally is set to end in a “currency crisis,” investor Jim Rogers said, adding that he may bet on a slide in equities after they jumped 34 percent in the U.S. in nine weeks.
  
  The rally in the dollar has been driven by investors covering their short sales, Rogers, 66, said in an interview with Bloomberg Television in Singapore. He may consider adding to his holdings of the yen and prefers the euro to the dollar or the pound, the investor added.
  
  “We’re going to have a currency crisis, probably this fall or the fall of 2010,” Rogers. “It’s been building up for a long time. We’ve had a huge rally in the dollar, an artificial rally in the dollar, so it’s time for a currency crisis.”
  
  The dollar has rallied against all of the so-called Group of 10 currencies except the yen over the past 12 months, according to data compiled by Bloomberg. The U.S. currency was at $1.3576 per euro today from $1.3582.
  
  So-called short sellers borrow securities and sell them on hopes of capturing a profit by replacing them after prices fall.
  
  The rally in U.S. stocks also signals a “correction,” Rogers said. He’s avoiding equities for the next two to three years because prospects haven’t changed, he added.
  
  The Standard & Poor’s 500 Index has jumped 34 percent from its March 9 low, erasing its losses for the year. The gauge plunged 38 percent in 2008, its worst year since the Great Depression.
  
  ‘Time for a Correction’
  
  “The market in the U.S. went up very powerfully for nine weeks in a row so of course it’s time for a correction,” Rogers said. “Fundamentals haven’t changed if you ask me. I don’t see the stock market as a great place to be in the next two to three years.”
  
  Equity markets may dip below recent lows as more troubles lay ahead in the financial market, Rogers said in an April 13 interview with Bloomberg TV. Rogers is the author of “A Bull in China: Investing Profitably in the World’s Greatest Market.”
  
  Rogers owns some Chinese and Japanese stocks, and also continues to hold some shares of airlines, he said without naming any companies. Stocks in emerging nations that supply natural resources may also perform better than U.S. shares, Rogers added.
  
  Commodities are still among the best bets for investors because of constrained capacity, the investor said. He has been buying agriculture-related commodities and prefers silver to gold, palladium and platinum, Rogers added