U.S. "undoubtedly in recession": Jim Rogers

Reuters
Thursday October 25, 2007

The United States has entered a recession, according to highly-regarded investor Jim Rogers, who told Britain's Daily Telegraph newspaper on Wednesday he was switching out of the dollar and into yen, the yuan and the Swiss franc.

The veteran investor, who predicted the 1999 commodities rally, also said he was still bullish about surging Chinese stock markets despite worries over a bubble.

Fears are growing over the health of the U.S. economy after the fallout from the subprime mortgage market crisis and the global credit crunch it triggered.

The U.S. Federal Reserve has already slashed borrowing costs by 50 basis points to 4.75 percent to try and shore up the world's biggest economy and is widely expected to lower interest rates again next week.

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"The US economy is undoubtedly in recession," Rogers told the Telegraph in Hong Kong in an article published on its Website.

"Many parts of industry are actually in a state worse than recession. If it were not for (Federal Reserve Chairman Ben) Bernanke putting huge amounts of money into the market, the stock market would probably be down much more than it is."

Rogers, who co-founded the Quantum Fund with billionaire investor George Soros in the 1970s, said it made sense to desert the dollar.

"All other things being equal during the next six months, that's the way I will go," he said. "But if the Swiss franc goes through the roof, I probably won't put money into the Swiss franc."

And he dismissed worries for now that surging Chinese equities had formed a bubble.

Full article here.

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