Posted on 01/23/2008 3:00:52 PM PST by blam
Dollar's golden era is ending, warns Soros
By Edmund Conway in Davos
Last Updated: 8:10pm GMT 23/01/2008
The billionaire investor famous for "breaking" the Bank of England in the 1990s has warned that Britain is heading for a recession.
George Soros said that a recession in both the United States and Britain "will be very difficult to avoid". He was speaking on the fringes of the World Economic Forum summit in Davos, Switzerland, where many of the world's top politicians and businessmen are meeting.
The billionaire investor expects the dollar to be usurped as the top currency
The warning is significant, since although many of the major investment banks now agree that the US is set to suffer a recession, most economists have predicted that Britain's fortunes will be far better.
His warning came less than 24 hours after the US Federal Reserve used an emergency three-quarter percentage point cut in interest rates to try to prevent the world's biggest economy slumping dramatically.
It will also fuel speculation that Mr Soros has been betting against the pound in recent months. Sterling has fallen dramatically since late last year, with the housing market slowing fast and the Bank of England being forced to cut interest rates.
Mr Soros also warned that the dollar's status as the world's reserve currency was drawing to an end, thanks in part to the financial crisis on Wall Street. He said the plight of US households, who are facing major slumps in nationwide house prices for the first time in living memory, was increasing the distaste among international investors for the greenback.
He said: "The current crisis is not only the bust that follows the housing boom, it's basically the end of a 60-year period of continuing credit expansion based on the dollar as the reserve currency. Now the rest of the world is increasingly unwilling to accumulate dollars."
The meetings in the Swiss mountain town have so far been dominated by talk about the US economic crisis, and the dramatic action taken by the Fed this week following massive slumps in global share prices.
Mr Soros made around $1bn in 1992 when he bet that the pound would fall as the Government clung to membership of the European Exchange Rate Mechanism.
He warned this week that the crisis facing the world's financial markets is the worst in 60 years, likely to cause a major realignment in the world economy, as emerging nations such as China and India gain more clout.
Whereas last year most attention at the Davos meetings was focused on the private equity companies which were riding high at the time, this year the spotlight is on the sovereign wealth funds which have played a major part in helping to buoy up struggling US banks by buying major stakes.
Oh weeeeeeeeeeell. SOROS said it, and Soros is a VERY objective and VERY unbiased and VERY fact-driven source.
I’ll be sure to stock up on Bolivars.
Why, oh WHY is that man allowed to breathe?
said the FPOS that's trying his best to make it happen!!!
I’m sure he’s doing his part with currency speculation.
I take great comfort in knowing it will not be long until he breathes his last breath, a party planned for him and Greenspan eventual deaths.
It might be worth going through a depression just to see that blowhard broke.
It could be the old man is losing it. Happens to many.
Soros is a known currency tamperer.
He was convicted in France of currency tampering. Thankfully for the French, they had switched to the Euro, just as the Franc was tanking, thanks to the shenanigans of Soros.
Soros is still wanted in Russia. In 2003, they invaded his offices in Moscow to arrest him for currency tampering. Conveniently, George had moved on to tampering with US currency, so he wasn’t there. The Russian police did arrest 5 of his operatives, whom Georgie left to twist in the wind of the Russian court system.
Thanks to the efforts of George Soros, the Russian Rouble enjoyed 600% inflation in just three years.
Soros made BILLIONS on the destruction of the Franc.
He made BILLIONS on the destruction of the Rouble.
He is makeing BILLIONS on the destruction of the dollar.
George Soros is a criminal and should be expedited to Russia where the justice system will give him more than the probation and fine that the French gave him.
Unfortunately, we don’t have an extradition treaty with the Russian Federation.
If he can talk it down another few percent, he probably makes hundreds of millions more than if he just liquidated his position today.
Based on this, I wouldn't be surprised to see a pretty big rally in the dollar, pretty darn soon. It's EXACTLY what he did about a generation ago, when he made over a BILLION $$$ shorting the British Pound.
Soros, what Putin likes most about America.
Wondering the same as I read this...
Soryass
made this brilliant observation with his 2 favorite other communists, Maria Bartiromo and Lawrence Summers, on CNBC(Communist News Broadcasting Company) this am in Davos....I Swear his breath was steamier than even his communist brethren....
There are, and always have been, systemic advantages that are not going away. America didn’t get to be dominant by being smarter or more vicious.
America became dominant because
1) America works 3 more weeks per year than Europe. Far less vacation.
2) The American Midwest, even in the dust bowl years, has never allowed an American famine. It is the richest dirt on the planet and that’s not changing short of a comet strike or the Yellowstone volcano going off.
3) America burned up the vast majority of the planet’s oil during the 20th century in order to outgrow everyone. Oil is the fuel of economic growth. As it disappears, no one will have the ability to reverse that consumption differential and catch up.
The cries of Decoupling Has Occurred! were completely destroyed this past weekend when the entire world’s equity markets collapsed because of a feared US recession.
India only recently gained independence.
Two World Wars knocked the stuffing out of Europe.
In that case, why not do them a favor just for good will? LOL!
IIRC a long time ago, Soros announced he was going to bring down the dollar. This was just as he was investing in the takeover of the Democrat Party.
I’ll have a refridgerator box.
Even in the 1950s the USA produced 2/3 of the oil that was being produced worldwide. Even now the USA is the third largest producer of oil and not far behind the first two.
He should be shot for levying war on the US.
Here's the upside....based on his current age, odds are in our favor we won't have to worry about that for very much longer.
He'll probably give all him money to the political groups he's established and the upside on that is the fact that Liberals don't know how to live within their budgets....so the money will run out soon after his death.
Shouldn't be necessary. By the time we'd be through the depression, he would be dead of old age.
I've long said that Soros' warning should be heeded here, but he probably should have updated his speech to reflect the bizarre circumstances of Monday and Tuesday. During those two days we saw the highly unusual scenario in which: (1) foreign stock markets collapses; (2) the Federal Reserve lowered interest rates (unexpectedly, I might add); and (3) the U.S. dollar grew stronger.
Items (2) and (3) almost never occur at the same time, and when all three of these occur at the same time it is always an indication that foreign investors are seeking refuge in the U.S. dollar for its stability -- which is the exact opposite of what his remarks indicate.
Soros might be able to manipulate a smaller country like England but it's harder to control the world.
Only recently? 60 years is not recently.
Owen, buddy.. Can you prove your assertion #3. How do you know how much oil is out there? The world is discovering vast oil fields every day.
Like Rush says.. oil is the engine that drives our freedom and democracy. That’s not going to change any time soon. All this alternative, renewable isn’t even a drop in a drop in the bucket.
We are screwing ourselves with this environmental insanity.
Is this where, as things get worse, the bipartisan CFR’s agenda for a NAU and the Amero ‘suddenly’ becomes an acceptable solution?
"He'll be first one up against the wall when the revoloution starts." < /DNA MODE >
So says the scumbag who would take great pleasure in it and do everything possible to make it happen.
Why hasn’t he been arrested ?
Yeah, 60 years is recently in terms of history.
And for the record, China’s leaders have a time horizon that extends many years beyond 60. If America wants to remain a world power, then we better start thinking beyond the next quarterly report or next election.
Ever wonder why the price of a bond goes up as its interest rate goes down?
weve got a spanking coming that we'll be lucky to survive as a Country
If people buy bonds, yields go down. Pretty simple. If the dollar was that weak, people wouldn’t buy US bonds which would force the yield up.
I say screw the spanking. If we can avoid it, then we should. There’s a problem, let’s fix it.
What does everyone suggest for someone who has their house as the major investment? I’m not so informed about investing but I don’t want to lose out too.
Soros does not have the wealth or power to affect the US dollar.
George Soros had EVERYTHING to do with the Dollar falling!! Warren Buffet also!
Not really. What good has it done the Chinese? All such an approach does is give them excuses for not performing. 10-20 years is reasonable. Any longer means that no one is accountable.
I dont disagree - but I worry that having two somewhat similar partys - we’ll continue walking headlong into it
You’re kidding, right? What good has it done the Chinese?
Within a single generagion they’ve gone from the point where a ping-pong match was a big deal to one of America’s largest creditors and a manufacturing powerhouse.
I worry, too. However, what needs to be done is what needs to be done. A lot of short term thinkers will scream bloody murder, but in the long run everyone will benefit.
Didn’t Soros also bring down the Bank of England???
Hello, Ann...
You said: “George Soros had EVERYTHING to do with the Dollar falling!! Warren Buffet also!”
Would you care to extrapolate or provide proof. Either will do...
Soros is a tiny billionnare in a trillion dollar world market.
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