Currencies: Jim Rogers Talks Of A Future Currency Crisis

Jim Rogers talked to CNBC and discussed the possibility of America losing its status as the worlds only reserve currency. This came to the fore again when Timothy Geitner made his visit this week to America's No1 creditor, China.

Luo Ping, a director general at the China Banking Regulatory Commission said, “Except for US treasuries, what can you hold? US treasuries are the safe haven. For everyone, including China, it is the only option. We hate you guys. Once you start issuing $1 trillion to $2 trillion [of bonds] we know the dollar is going to depreciate, so we hate you guys, but there is nothing much we can do.”

Russia Today reported the following comments by President Medvedev on 6th June:

“No national currency can be appointed to the world's reserve. The role of the Russian Federation is to make the Rouble a more attractive, convenient, and reliable method of transaction for all those who are ready to use it.”

Deputy Prime Minister Igor Sechin dealt the greenback another blow at the forum on Friday. He said oil prices should not be tied to the dollar.

Russia is not alone in welcoming the winds of change – China and Brazil have echoed the idea of abandoning the greenback. Yet any nation with huge dollar holdings also fears the dollar’s collapse.

On April 6th, I wrote in The Constant Broker:

"China did not make too much of the purported new reserve currency. It was (as I had said previously) pure political positioning. But don't be surprised if in the future, you see a repegging of the Yuan and a more aggressive use of the Renminbi as a regional currency or alternative to the US dollar. However, a global basket of currencies would be very difficult to achieve and would ratchet up the powers of the IMF to an unacceptable level. It helps its proponents that the present boss of the IMF is Dominique Strauss Kahn, an unreconstructed French socialist".



Whilst I believe even more that the Renminbi will take a larger role as a reserve currency, I also believe that I may have been wrong regarding the possibility of a global basket of currencies. If the political will exists, then even that which seems impossible can be made possible.