Rogers, chairman of Rogers Holdings, said any currency debasement would only cause inflation, which boded ill for a country that was suffering from growing deficits.
“History has shown that debasing one’s currency has not worked in the mid- or long-term, and it only works sometimes in the short-term,” he said here yesterday.
He was speaking at a seminar entitled “Investment Opportunities for 2010 and Beyond for Asian Companies and Investors” organised by MPH Bookstore Sdn Bhd.
“The US is still denying the fact that it is facing inflation. They somehow believe that spending and borrowing more money is going to solve the problem,” Rogers said, adding that it should emulate South Korea, Mexico and the Scandinavian countries which reorganised their financial structure after their respective recessions.
“South Korea made fundamental changes to its financial structure after the 1997 Asian financial crisis. It might have been tough in the first two to three years, but see how well South Korea has turned out today,” he said.
Rogers. Photo by Mohd Izwan Mohd Nazam
Rogers, an advocate of commodities, is one of a few commentators who predict the US would experience a double-dip recession by 2012.
“Historically, the US has always experienced a recession every four to six years. More problems would come out of the US in the next year or so.
Investors should focus on Asia,” he said, adding that creditor countries like China was set to grow this century.
Rogers said investors needed to learn more about commodities.
“As central banks are printing more money (which causes devaluation and inflation), commodities are the way to go. The fact is that commodities such as oil are depleting while demands are getting higher. As countries such as China grow, they would consume more oil,” he said.
He added that retail investors could look into commodities such as sugar or invest in sugar companies.
“My general advice is to invest in something that you know. For example, you can invest in sugar futures or sugar companies but it has to be for the long-term. Do not worry about margin calls,” he said, adding that he anticipated sugar consumption to go up in the future.
On green energy, Rogers said he was bullish about the renewable resource but it would take time for it to be competitively priced.
“Everyone is positive about green energy like solar and wind but unfortunately, it’s not yet economical. It would however become competitively priced when oil gets too expensive. There are a lot of government subsidies being offered for it as well,” he said.
Written by Max Koh
This article appeared in The Edge Financial Daily, July 9, 2010.
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