Jim Rogers on Sky News The Pound is Terribly Flawed

Leading American investor Jim Rogers is certain Britain's economy will be downgraded in the forseeable future.
Speaking exclusively to Sky News Business, his gloomy outlook comes just a day after premier ratings agency Standard and Poor's revision of Britain's AAA rating to a negative outlook.

"Of course it's going to come, it's going to come in the US as well," Mr Rogers told Sky's Nina de Roy.

"The US should be downgraded already if you ask me, and the UK as well."

Singapore-based Mr Rogers, 66, has generated billions for his clients investing with hedge fund legend George Soros - who later made a billion betting against the pound.

"Both the US and the UK unfortunately both have gigantic debts, and both sets of politicians are making mistakes," Mr Rogers said.

"They're pouring huge amounts of money into the economy which is going to make some things look better for some people for a while, but it won't last."

Crucially, Mr Rogers believes the famous rating agencies are scared of revealing the dire state of American finances.

"I'm still not that optimistic about sterling or the US dollar, I find both of these currencies terribly flawed"
"I think the rating agencies are probably afraid to do it because Congress will come down hard on them and maybe the same with the UK," he said, adding that traders know the true state of affairs.

"It's not going to have that much of an effect because the market knows the situation so it doesn't matter whether I say you're AA or AAA or A."

Although the pound has rallied recently against the dollar, Mr Rogers insists problems are endemic for both currencies.

"We've already had a very nice rally over the last three or four months, if you compare to the US dollar - not necessarily compared to other currencies," he said.

"Even in 1930 the stock market went up 50% on it's way to going down 90%, but rallies are normal and I don't think that it's much more than just a normal kind of rally in a bear market."
Mr Rogers simply cannot get enthused for the pound.

"I'm still not that optimistic about sterling or the US dollar, I find both of these currencies terribly flawed," he said.

The banking system bailouts have saddled both countries and Mr Rogers insists it needs to stop.

He added: "The poor US and UK taxpayers have stupendous debts being forced on them and we are going to be faced with gigantic tax and debt problems very, very shortly because of what the politicians in Washington and in Whitehall are doing."
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