Legendary investor (and co-founder, with George Soros, of the Quantum Fund) Jim Rogers, speaking at an ABN Amro conference in Amsterdam on Tuesday, said that he hopes to sell all his assets denominated in U.S. dollars. What’s the investment legend buying? “I don’t see how one can really lose on the renminbi in the next decade or so,” he said, referring to China’s currency. “It’s gotta go. It’s gotta triple. It’s gotta quadruple.”

If it’s gotta do anything, Jim, it’s gotta collapse. Although it’s hard to argue with the guru who in 1999 correctly predicted the bull run in commodities, Rogers absolutely has to learn more about China.

It is true, as Rogers says, that the Bush administration has been trying to devalue the American currency. Treasury Secretary Henry Paulson may talk about his strong-dollar policy, but he is not doing much to maintain the value of the greenback. On the contrary, he is trying to weaken it. And he is succeeding. The dollar is trading at historic lows against the euro and other currencies, including the Chinese one. Yesterday, for instance, the yuan, as the Chinese currency is informally known, broke the CNY7.5=US$1 mark—after blasting through 7.6 on July 3. The renminbi has appreciated about 8 percent against the dollar since July 21, 2005, when China unpegged its currency from America’s.

The yuan would go up about 35 percent—give or take twenty percentage points—if Beijing allowed its currency to trade freely. But these predictions of appreciation all assume that China will be able to maintain its elaborate capital controls. If they come down, so will the renminbi. Chinese businesses and citizens, if given the chance, will put some of their money abroad. When they do so, demand for the renminbi will shrink as they exchange local currency for foreign ones. China’s economy certainly looks strong with its 11.5 percent GDP growth, but its apparent success is built on government-created distortions that cannot be maintained for long. The Chinese know this.

All developing economies endure crisis at one time or another. Argentina’s, which started in the beginning of this decade, might be the template for China’s. When Beijing faces market turbulence of its own, all that Jim Rogers knows will become obsolete within minutes. If we have learned one thing from panics in the last hundred years, it’s that they follow the rapid creation of wealth. Chinese leaders have created a massive bubble in their country, and, despite repeated advice from others, have not really tried to stop the boom. China does not have a market economy; therefore, few mechanisms are in place to make necessary adjustments that minimize imbalances as they arise. When crisis comes, it will come big.

Crisis in China? It’s gotta happen, Jim, and when it does, you’re gonna lose a lot of money.