The euro and the Swiss franc will be smart currency plays in 2012, Jim Rogers, the billionaire investor and author, told CNBC Tuesday.
Rogers, who recommended buying the euro (which has since fallen in value) in an appearance on CNBC in November, said that he was thinking about buying more euros after selling some in recent weeks, as hedge funds unwind their short positions in the currency.
“I suspect [German Chancellor Angela Merkel] and that crowd will do something to make us feel better,” he added.
Rogers said calls for the European Central Bank to further monetise debt would be a “horrible mistake” and predicted that the markets will run out of patience later in 2012.
“The market will start saying: ‘Come on guys, we have had enough, this is shoddy and we’re not going to play any more,’ ” he predicted.
Asked how well his fund performed in 2011, Rogers said that he is “still able to pay his bills” and that the fund had fared better than it had the previous year.
Germany’s Merkel and French President Nicolas Sarkozy will meet next week to try and hone the details of the latest proposals for the euro zone.
Rogers hopes that Germany will have a “long-term aversion” to monetizing debt.
“Everybody in Northern Europe knows that they don’t want to bail out the Portuguese and the Greeks any more,” he said.
A host of European policymakers have warned that 2012 could be another difficult year for the region.
The Swiss franc will become the safest haven in the currency markets as the U.S. dollar and the yen’s status as safe havens looks shakier, Rogers believes.
He also thinks that the Swiss Central Bank’s attempts to keep the currency from strengthening above 1.20 against the euro — moves aimed at protecting Swiss exports — will ultimately fail.
“In my experience in currency markets, the markets have more money than any central bank,” he said.
Rogers believes that 2013-14 “will be a terrible hangover” for the market after a relatively upbeat 2012, as governments manipulate markets in an important year for elections. U.S. President Barack Obama and France’s Sarkozy are among the world leaders facing an election this year.
“We’re going to see a lot of distortions in the markets because a lot of governments are going to be finding a lot of money and printing a lot of money,” he said. “Can America continue to add staggering amounts of debt to the balance sheet and print staggering amounts of money? I don’t think so.”
In contrast, many economists believe that 2012 will be a bleak year for the global economy.
Rogers says he should have bought U.S. government bonds two years ago and described the current high levels as a “bubble.” Other investors are worried that the price of U.S. Treasurys will fall whenever interest rates begin rising from their historically low levels.
He believes that the Canadian dollar is “one of the best currencies around.”
In Asia, Rogers’ largest positions are in the yen and renminbi — and he said that he will buy more renminbi any chance he gets.
Rogers, who is based in Singapore, predicted that Myanmar, the troubled state previously known as Burma, will be the best place to invest for the next 10 to 20 years — although American nationals cannot invest there.
The Myanmar government, perhaps best known internationally for imprisoning Nobel Peace Prize-winning dissident Aung San Suu Kyi, has recently reorganized its currency and become more open to foreign investment.
© 2012 CNBC.com