Browse Category: Economic Catastrophe

George Soros Shares Economic Prediction

George Soros is no stranger to the media spotlight for his economic analysis and predictions. As an incredibly successful investor and philanthropist, George Soros has had more than his fair share of success in analyzing trends in currency markets and hedging his bets against anticipated currency market fluctuations. As of 2014, Forbes listed Soros as the richest hedge fund manager and as the seventh richest American individual. As the founder and chair of Soros Fund Management, Soros has made quite the mark by making sound investments and having an in-depth understanding of international markets. In reaction to the economic crisis in the U.S. of 2007 and 2008, Soros established the Institute for New Economic Thinking in 2009 as an economic think tank with the goal of analyzing international markets and proposing cutting-edge solutions for reorganizing the international economic system.

Given that Soros is so highly regarded for his take on international markets, his recent prediction about the economy of China is causing the international community to reconsider its position on the Chinese markets. At the beginning of this year at an economic forum in Sri Lanka, George Soros explained that the current status of the Chinese economy is serious cause for concern about its stability and potential for total collapse very soon. In a very troubling announcement, Soros says that he is seeing the same indicators of a major collapse in China that were present for the U.S. economy before the crisis of 2008. Bloomberg reported on Soros’ predictions, which he explains are based on various factors, including the fact that the Chinese economy is struggling to adjust to a new growth model. In the past, the economy of China was heavily based on manufacturing and investment. The country was previously viewed as a haven for cheap labor and very attractive to investors who valued the economic potential in manufacturing. Now, China has become more of a consumer-driven and services economy, which is a much different path than it had previously embraced. The transition has not been smooth in general for China and continues to encourage instability in Chinese markets. As a result of increasing uncertainty surrounding the future of the Chinese economy, measures of volatility are on a steady incline for the country.
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According to Soros, the measures from the Chinese government to bring stability to the Chinese economy are not amounting to much so far. Interest rates have already been cut to record lows, and the Chinese government has pumped an incredible amount of money in the economy to try and save it from collapse. While Soros generally thinks government intervention is necessary to correct major market upsets like this, the influx of government money may not be the best policy, especially in light of the country’s mounting debt problem. Soros and other global investors are expressing some concern that the country does not have a sound strategy to pay down debts and decrease spending in order to get the economy back on track to a normal, steady growth model.

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Global Markets To Remain Volatile In The Eyes Of George Soros

The financial markets of the world could be heading for a repeat of the 2008 economic slowdown if serious issues are not addressed as a matter of urgency, claims hedge fund icon George Soros. Over the course of his career Soros has brought his personal fortune up to around $23 billion in total through a hedge fund averaging 20 percent growth each year during the course of its operation. Bloomberg Business reports an economic conference in Colombo, Sri Lanka was the site of an interview by Bloomberg held with George Soros, in which he explained his belief that the conditions in the world were replicating those leading to the 2008 economic slowdown.

George Soros believes the global markets are moving towards another crisis similar to that seen in 2008 after various problems were seen in the Chinese and European economies over recent years. Born in Hungary, George Soros believes eastern Europe could hold the key to the entire collapse of the Euro zone single currency. Ukraine and Greece are already seeing issues with debts, but a failing Ukraine fills Soros with dread over the possibilities of a rising Russian nation forcing its way into mainland Europe. Soros himself has seen the issues facing Europe after his own Open Society Foundations was barred from working in Russia after being identified as a security threat, CNBC reports.

The major problems facing the world have been identified by George Soros as coming from China, including the failure of the nation to cope with the changes being seen in their economy. The success of the Chinese economy was largely based upon the manufacturing and investment sectors, but in recent times the economy has been shifting to a more service and consumption based market. Soros believes Chinese officials have not handled the changes to their economy in the correct way with large amounts of currency flooding the market, and lower interest rates than have been seen in living memory. The many different trade agreements the Chinese government have established with countries around the world mean the problems seen in the economy will cause a ripple effect throughout the world, which the hedge fund legend believes could see major issues if China continues to struggle.