Jim Rogers Says U.S. Commodity Curbs to Drive Markets Overseas

By Claire Leow

Aug. 6 (Bloomberg) -- U.S. proposals to place curbs on commodities trading will drive business overseas, particularly to Asia, said Jim Rogers, chairman of Rogers Holdings.

“It is remarkable because America is shooting itself in the foot again,” he said in an interview in Singapore today. “It’s going to drive the business away and the rest of the world is going to welcome it with open arms.”

U.S. Treasury Secretary Timothy Geithner is urging Congress to rein in the $592 trillion derivatives market with new U.S. laws that are “difficult to evade.” Opaque financial products contributed to almost $1.5 trillion in writedowns and losses at the world’s biggest banks, brokers and insurers since the start of 2007, according to data compiled by Bloomberg.

“The end result is going to be Singapore, or Hong Kong, or Shanghai or who-knows-where” will be “quite happy to take that business,” he added.

As the U.S. contemplates tighter regulation, China’s interest in commodities is accelerating, Rogers said. The world’s most populous country already accounts for about one- third of global copper usage. It also accounts for about one- sixth of wheat demand and one-fifth of soybeans, according to the U.S. Department of Agriculture.

“The three commodity exchanges in China are booming,” he said. “Dalian trades more soybean contracts than Chicago does already, and that’s with a blocked currency, a closed market. Can you imagine what’s going to happen if and when they open that market up to foreigners? It’s going to explode.”

To contact the reporter on this story: Claire Leow in Singapore at cleow@bloomberg.net