Bets on Inflation – Full Steam in the Wrong Direction

posted by Nima

July 8, 2009 · Posted in General Economics 

Bloomberg writes Jim Rogers Sells Dollars, Plans to Short Treasuries:

July 6 (Bloomberg) — The dollar and U.S. Treasuries are both likely to slide as soaring government debt in the world’s biggest economy undermines confidence in its assets, according to Jim Rogers, chairman of Rogers Holdings.

“The government is printing lots of money and borrowing even more; that’s not the basis for a sound currency,” he said in a telephone interview today from Singapore. “The idea that anybody would lend money to the U.S. government for 30 years at 3 or 4 or 5 or 6 percent interest is mind-boggling to me.”

Rogers, the author of books including “Investment Biker” and “Adventure Capitalist”, said he holds fewer dollars than a year ago and plans to “short U.S. government bonds someday.” A short bet involves selling a security you don’t own with a view to buying it back after the price has fallen.

A time will come when Jim Rogers, Peter Schiff, Mark Faber, and other hyperinflationists will have to come forward and tell their investors that they were plain wrong. The only other option they have it to continue to predict for years and years to come, in millennial fashion, that someday their prophecy of hyperinflation will become reality. It is not a surprise that a lot of the current phenomena are entirely confusing and mind-boggling to them.

I would advise anyone who is still listening to them on this matter to consider Inflation & Deflation Revisited, take a look around and see what is going on with grocery stores, commercial properties, credit card defaults, friends who are losing their jobs, the immense appetite for savings, etc.

Adjust your investment strategy accordingly, and cash in while hyperinflationists continue lose money.

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