Jim Rogers: Fed cut was serious mistake,to lead to higher US inflation; Not bullish on EMs except China

commodity guru Jim Rogers say that the recent cut by the Fed was a serious mistake and it will lead to higher US inflation. Higher commodity prices and weak dollar may trigger this US recession. He says that the dollar is likely to continue depreciating.

 

"Fed rate cut in my view is a serious mistake, it is going to lead to more inflation in the US and higher long term interest rates. The bonds have already started going down in the US, commodities have been sky rocketing since and it is going to lead to weakening dollar which of course means more inflation and higher interest rates. Also this means a worse recession in the US rather than a better economic view," Rogers said.

 

"US dollar is going to go down for years to come, whether you should buy it or sell it. This is world's worst market time and I am the world's worst short-term trader. The US dollar has even been going down against the rupee, so nearly everything is going up against the US dollar," he says.

 

Rogers continues to remian bullish on gold. "I own gold, I continue to own gold, I expect to buy more gold. Gold will double during the course of the bull market, which has years to go. You are going to make more money in agriculture as far as I am concerned but gold is certainly a commodity worth owning and I do own it and plan to buy more," he said. "I am not smart enough to know where the gold or base metals prices will be by the end of the year. I just know I own it, and when it will react I will buy more and I do not plan to sell gold for many many years," he adds..

 

On emerging markets he says that he has sold all his emerging market holdings except China, where he still holds a large position.

 

He is also bullish on the prospects of sugar. "Sugar, I expect, will be one of the most interesting commodities going forward, it had a huge run then it settled down by 50%. I suspect it is time for it to go up again. This week I re-examined sugar to see if I should add to my positions in sugar though cotton and coffee will probably do well. Agriculture is the best place to be as far as I am concerned, agriculture commodities is one of the very best asset classes in the world in September 2007 and going forward," Rogers says.