The Dollar is Going to Be a "Disaster", That is Why Jim Rogers is Buying

Jim Rogers, famed commodities investor, appeared on CNBC on Wednesday. In his appearance, he characterized the U.S. dollar as a complete disaster and predicted a coming financial shock that would be worse than 2008. When asked about the potential for a government default should the debt ceiling not be raised, Rogers—disagreeing with investors like Bill Gross—predicted that a failure to raise the debt ceiling and the resulting shut down of the government would be bullish for the U.S. dollar. According to Rogers, such a scenario would show that the U.S. government was serious about reducing spending and it would therefore increase investors' confidence in the dollar. Despite the slowdown in the Chinese economy, Rogers remained bullish on the country. Rogers stated that retail investors might consider purchasing the yuan as an investment. On the U.S. dollar, Rogers was extremely bearish, but explained that he was presently long. His investment thesis was riding on the fact that the dollar was due for a bear-market rally as too many investors had gone short. On commodities, Rogers was a long-term bull, especially on agricultural commodities, citing supply problems. Action Items Bullish: Traders who believe that Rogers' assessment is accurate might want to consider the following trades:

• Buy PowerShares DB US Dollar Bullish Index UUP. UUP is a long play on the U.S. dollar. Though Rogers is short the dollar in the long-run, he anticipates a bear-market rally.
• Buy PowerShares DB Agriculture Double Long ETN DAG. DAG returns a value corresponding to the general strength of agricultural commodities. Rogers is bullish on agricultural commodities.

Bearish: Traders who believe that Rogers is misguided may consider taking positions in the following:

• PowerShares DB US Dollar Bearish Index UDN is a short dollar play. UDN may be a play Rogers would like in the longer term, but in the short run he anticipates the dollar to rally.
• ProShares UltraShort FTSE China 25 FXP is a short play on China. Rogers remains a Chinese bull.

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