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George Soros has returned to bearish investments lured by opportunities of what he sees as coming economic troubles. Soros is worried about the global economic outlook, predicting an imminent significant market shift may be at hand. Soros Fund Management LLC, which currently manages about $30 billion of funds on behalf of Soros and his family, sold stocks to buy gold and shares for gold miners in anticipation for weaknesses in the various markets in the economy. It is custom for investors to view gold as a haven during economic turmoil.

Soros is the founder and chair of Open Society Foundation and Soros Fund Management. He gained fame in 1992 when risked $10 billion of his money to a single currency speculation when he gambled the British Pound. George Soros bet was that British Pound had to devalue its currency and no matter how much intervention they try would not avert the devaluation of the currency. He turned out to be right in his gamble and a single day; the trade generated a profit of $1 billion in profit. As a result, he is referred by many people as “the man who broke the Bank of England”.

Read more:
George Soros Portfolio – 2016 Stock Picks and Performances

Billionaire Investor George Soros Sees Economic Trouble Ahead

Soros is not new to controversy as he was cited as a key trader behind the Asian financial crisis in 1997 having large bet against the Thai baht. He has also criticized the China’s economic outlook saying that the strategies being implemented by the China’s authorities are focusing more on growth and failing to recognize the importance of debt control. Chinese authorities have been angered by Soros comment saying that Soros has been making such baseless prediction without any facts reflecting the real economic outlook of China.

One of the reasons Soros believes the world economy is headed in the wrong direction is the fear he has that China’s debt is going to cause havoc in the global economy. George Soros believes that if the China’s debt problem is imitating the U.S. debt surge in 2007 which later led to the world economic crisis. According to Soros, China will not avoid a hard landing especially at a time when the authorities are focusing on stimulating growth instead of controlling the level of debt.

To benefit from the imminent global economic slowdown, Soros has decided to sell stocks and buy up the gold investments. One of the world’s top investors is now investing in gold betting against equities. Again, He appears to benefit from his decisions since the S&P rose about 20% from 2013 to 2014. It is a strategy that Soros has made much of his wealth. Investors believe it is a good plan because buying puts a portfolio from tail risk especially if one can afford it.

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Ukraine is struggling with a plan to pay its creditors, and the International Monetary Fund has demanded a condition for further financial support. The cost of Russian aggression has been very high including leading the economy of Russia to a crisis and taking a terrible toll on the economy of new Ukraine. The ailing economy of Ukraine has made unsustainable to pay the country’s foreign debt pf $18 billion. There are, however, negotiations on how Ukraine can structure its debt that is underway in San Francisco.

The factors preventing Ukraine from obtaining further foreign debt is because it doesn’t have recourse to bankruptcy. Without chapter 11 for the sovereign borrowers, it ‘s hard to establish a cease-fire between the borrowers and lenders to decide which debts can be reorganized. The only strategy remaining for Ukraine and its private lenders is to negotiate in a setting that can “make things right.” In the current context, Ukraine’s only leverage is to threaten to default unless it gets a debt relief. In return, the bondholders have threatened the Ukraine government that they will not invest in the country for a long time in case of default.

Read more:
Ukraine Deserves Debt Relief

Ukraine & Europe: What Should Be Done?

Europe understands that Ukraine’s default will be costly to Europe and will have long lasting effects mainly when the lenders drag out the battle as it happened for Greece and some of the Latin American nations. When negotiations for a deal between the country and its lenders is expedited, even if it causes a loss in some profit for the lenders, the country can get back to its feet in a year or two. Europe has to understand that it is not the default that keeps the country out of the markets, but the economic problems that lead the default in the first place.

In 1989, the Americas were faced with the same situation and the U.S. Treasury Secretary; Mr. Nicholas Brady had to unveil a plan that urged banks to accept relief for Latin American countries that are sensible with their reforms. Mr. Brady was worried about the savvy investors like George Soros, who would have looked into the future rather than the past and considered whether to lend the country. At the moment, the Ukrainian government is doing its best to ensure that it got the kinds of structural reforms development by Brady in 1989. The strategies include reforming the judicial system, rooting out corruption, weaning the country from Russia gas, and more.

According to George Soros Ukraine, the sanctions imposed by the West on Russia are not enough to get Ukraine out of the current crisis. Russia is already suffering a financial crisis like the one witnessed in 1998. The final blow to Russia and a winning strategy for Europe is to help Ukraine financially to ensure it can defend itself especially economically and militarily. European countries which are now going through a deflationary period. Injecting capital in the Ukrainian economy will help the country increase spending in the mega projects which will also increase the level of demand and spending in the country and in turn help Europe overcome the current crisis.

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Hedge Fund Manager and investment strategist, George Soros is known internationally for his expertise in global markets on He recently predicted in January 2016 to Bloomberg that the global economy is headed towards financial disaster if China doesn’t develop a new growth model. During the beginning of the month, China was responsible for effects on international currency, the stock market, and commodity market. The reason, the country’s yuan decreased in value the first week of the month. Soros later in February spoke out against the Federal Reserves raising rates in the United States during December 2015.

According to Yahoo! Finance, Soros and other hedge fund managers believe the Federal Reserves on increase the rate to hastily in spite of a slowing economy. They said it was too late and the rate increase should have happened in 2014. If the rate is increased in 2016, Soros said he would be astonished. CEO, Esther George of the Federal Reserve in Kansas City admitted the rate was raised to late, based on an online article published by Market Realist. She also said that “growth of the economy, stable job growth, and moderate high rates of inflation in the United States is the reason the U.S. economy may permit further rate increases.″

In February, Esther George said the economy is presently in good position. She didn’t reveal when the next rate increase is likely to happen. William Dubley, New York City Federal Reserve said the first week of February, that the financial conditions in the United States are extremely constricted and an increase in the rate is a “weakening outlook for global economy (VEU) that would need to be taken into account.″ The Federal Reserve was criticized in the Financial Crisis Inquiry Report on January 2011 for neglecting to react to the mortgage crisis during the Great Recession period. The agency should have set judicious lending criterions for obtaining mortgages.

George Soros knows the trends of the economy and shares his experience and predictions to investors and interested individuals. Since the mid-1960′s, he has watched the economy fluctuate and global market crisis. If the Federal Reserves cut the rate in 2016, Soros said it would be to correct the rate increase in December 2015 when the economy was slowing down. For as a prediction of the next move of the Federal Reserve, Stanley Fisher, Vice-Chairman said it was difficult to predict.
Rate increases and decreases are actions by the U.S. Federal Government and have an essential role in the U.S. economy. When taxes are adjusted it will either slow down the growth rate in the economy or increase it. George Soros has knowledge and discernment of international economics. He successfully earned a degree from London School of Economics and manages over $20 billion in hedge funds.

George Soros is the founder of Open Society and the Soros Foundation. The Open Society was started in 1979. The billionaire had always wanted a free society, and the foundation was a dream come true. He started the foundation after acquiring his wealth in America. His wealth is mostly from his hedge fund organization, Soros Foundation. He has always been against authoritarian types of government, and the Open Society helps him achieve it. The organization has been very influential in different parts of the world, and at the moment; it has spread in over one hundred countries. George Soros ambition is to improve these governments because he understands that every imperfect thing can be improved. His first activity was supporting education for black students in South Africa during the apartheid period.

George Soros wealth has made him get a higher degree of independence that other people in the world do not have, and this enables him to take a stand especially on the controversial issues that affect the community. Before the 2008 financial crisis, Soros had earlier warned the world about it. This crisis happened, leaving the world in a serious situation.

Recently, George Soros was interviewed by the Germany magazine about the European Union, and his response shocked many people. Soros Believes that the European Union is on the verge of collapsing and the only person who can save it from the problem is Angela Merkel, the chancellor of Germany.

Previously, before the interview was conducted, the Time magazine wrote their cover about the story, calling Angela the Chancellor of the Free world. George Soros believes that the magazine was justified because Angela deserves the title. This statement came as a shock to the people, bearing in mind that the billionaire has always been critical about Angela, always against her policies and ideas for the longest time.

According to George Soros, Angela is indirectly the leader of the union after Ukraine crisis, and she should take the responsibility of saving the union. In the past, Angela was loved by her people in Germany because of her leadership skills. She would hear their opinions and act according to the mood. However, concerning the migration crisis that is currently threatening the union, Angela acted without consulting his citizens. This shocked many and the citizens have started hating her.

On the other hand, George Soros is happy about the current stand that was taken by the Chancellor, and he says that she is on the right track. The chancellor was courageous enough to ask the Germany citizens to welcome the refugees from different countries to safeguard the European Union and also to end the ongoing migration crisis. The future of the union lies in the hands of the people of Germany.