Rogers Says China, World Should Raise Rates in Inflation Fight
2010-08-25 04:25:27.320 GMT
By Bloomberg News
Aug. 25 (Bloomberg) -- China and other global economies
should increase interest rates to contain a surge in inflation,
said investor Jim Rogers, chairman of Rogers Holdings.
"Everyone should be raising interest rates, they are too
low worldwide," Rogers said in a phone interview from Singapore.
"If the world economy gets better, that's good for commodities
demand. If the world economy does not get better, stocks are
going to lose a lot as governments will print more money."
China's central bank hasn't increased rates since November
2007. In the U.S., the Federal Reserve this month left the
overnight interbank lending rate target in a range of zero to
0.25 percent, where it's been since December 2008, while the
European Central Bank has kept its key interest rate at a record
low of 1 percent.
Policy makers in Malaysia, South Korea, Taiwan and Thailand
have increased the cost of borrowing at least once this year,
while India has boosted rates four times in five months.
The global economy is at the risk of prolonging a recession
after reports over the past two days showed U.S. home sales
plunged by a record and Japan's export growth slowed for a fifth
month in July, he said.
"We never got out of the first recession," Rogers said.
"If the U.S. and Europe continue to slow down, that's going to
affect everyone. The Chinese economy is 1/10 of the U.S. and
Europe and India is a quarter of China, they can't bail us
out."
Rogers, who predicted the start of the global commodities
rally in 1999, said he was short emerging markets and stocks and
long on commodities.
"Commodities will go above their old high sometime in the
next decade even if they only grow 5 to 6 percent annually,"
said Rogers, who is a consultant for the Dalian Commodity
Exchange.
Rogers said he would resume buying China's stocks if they
were to tumble as they did during the aftermath of the global
financial crisis in 2008, when they plunged 65 percent. "I
haven't bought since the fall of 2008," he said. "It it were
to happen again, I hope that I'm smart enough to buy again."
For Related News and Information:
Top China Stories: TOP CHINA <GO>
Emerging-Markets Market View: EMMV <GO>
--Allen Wan. With assistance from Chua Kong Ho. Editors: Richard
Frost, Linus Chua
To contact the Bloomberg News staff on this story:
Allen Wan in Shanghai at +86-21-6104-7041 or
awan3@bloomberg.net
To contact the editor responsible for this story:
Linus Chua at +65-6212-1530 or
lchua@bloomberg.net
2010-08-25 04:25:27.320 GMT
By Bloomberg News
Aug. 25 (Bloomberg) -- China and other global economies
should increase interest rates to contain a surge in inflation,
said investor Jim Rogers, chairman of Rogers Holdings.
"Everyone should be raising interest rates, they are too
low worldwide," Rogers said in a phone interview from Singapore.
"If the world economy gets better, that's good for commodities
demand. If the world economy does not get better, stocks are
going to lose a lot as governments will print more money."
China's central bank hasn't increased rates since November
2007. In the U.S., the Federal Reserve this month left the
overnight interbank lending rate target in a range of zero to
0.25 percent, where it's been since December 2008, while the
European Central Bank has kept its key interest rate at a record
low of 1 percent.
Policy makers in Malaysia, South Korea, Taiwan and Thailand
have increased the cost of borrowing at least once this year,
while India has boosted rates four times in five months.
The global economy is at the risk of prolonging a recession
after reports over the past two days showed U.S. home sales
plunged by a record and Japan's export growth slowed for a fifth
month in July, he said.
"We never got out of the first recession," Rogers said.
"If the U.S. and Europe continue to slow down, that's going to
affect everyone. The Chinese economy is 1/10 of the U.S. and
Europe and India is a quarter of China, they can't bail us
out."
Rogers, who predicted the start of the global commodities
rally in 1999, said he was short emerging markets and stocks and
long on commodities.
"Commodities will go above their old high sometime in the
next decade even if they only grow 5 to 6 percent annually,"
said Rogers, who is a consultant for the Dalian Commodity
Exchange.
Rogers said he would resume buying China's stocks if they
were to tumble as they did during the aftermath of the global
financial crisis in 2008, when they plunged 65 percent. "I
haven't bought since the fall of 2008," he said. "It it were
to happen again, I hope that I'm smart enough to buy again."
For Related News and Information:
Top China Stories: TOP CHINA <GO>
Emerging-Markets Market View: EMMV <GO>
--Allen Wan. With assistance from Chua Kong Ho. Editors: Richard
Frost, Linus Chua
To contact the Bloomberg News staff on this story:
Allen Wan in Shanghai at +86-21-6104-7041 or
awan3@bloomberg.net
To contact the editor responsible for this story:
Linus Chua at +65-6212-1530 or
lchua@bloomberg.net
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