Category Archives: Crisis in Global Markets

George Soros Focuses on China’s Impact During Market Chaos

Nearly eight years after stock markets across the world virtually collapsed in unison, billionaire financier George Soros remains concerned that the world could be looking at a nightmarish replay of those circumstances.

Back on January 7, Soros indicated the China’s continuing economic hiccups are the cornerstone of such thinking on his part. Citing the twin problems of currency devaluation and the struggle to uncover a new way to grow their massive economy on nybooks, Soros indicated that the country’s ability to adjust to such concerns will help determine if what he considers a crisis develops into a full-blown economic disaster as it did in 2008.

At the time Soros uttered those words, the calendar year had gotten off to such a volatile start that more than $2.5 trillion had been lost in just the first few days. Those losses continued for a while longer, but have since eased up.

Still, a litmus test for many tends to be the various volatility indexes across world economic markets. All of them were showing great concern, since higher levels of what’s known as the fear gauge make all investors uneasy. That sort of mentality then trickles down into the entire economy.

The fact that China is currently the world’s second largest economy (behind the United States), is a factor that automatically raises their stature in financial markets. That means that their massive population and the world that depends on their trading capabilities have to thrive in some fashion to prevent negative economic factors from reverberating around the globe.
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China’s main issue has been a slowing down of its manufacturing sector, which has resulted in the Communist Party government taking marginal steps to address the problem by trying to push a more service-based economy and greater consumption. Putting billions of dollars into this sector and also slashing interest rates were their responses, with Soros focusing more on the latter approach to make his point.

Soros believes with China still attempting to develop its entire massive country, the rural areas need positive interest rates to have the opportunity to reach their potential. This is also true of other countries that have teetering economies.

The comments by Soros about the dangers of not handling such matters hearken back to 2011, when he was part of a Washington-based panel that discussed the European economic crisis that was then enveloping that continent. More specifically, he spoke of Greece’s disastrous economy giving off the same warning signs that he saw three years earlier.

Of course, with 65 years of experience in the world of high finance, Soros’ words tend to draw much more attention than the pronouncements of others. That’s because he correctly predicted in 1992 that a devaluation of the pound was how the United Kingdom would react during another era of economic turmoil.

Such thinking helped him earn approximately $1 billion on his investment, which only added to his massive fortune, which is estimated by Bloomberg to be roughly $27.3 billion.

Learn more about George Soros:

George Soros Cautions against Chinese Impending Crisis.

With china’s currency Yuan devaluing, there are fears on global markets following suit. Billionaire George Soros warned investors on Bloomberg to take caution while investing. He said this in an economic forum which was held in Sri Lanka on Thursday. This comes as global currency and equities are already showing signs of an impending crisis. This year alone global equities lost close to 2.5 trillion. Soros warns that China has a huge adjustment problem. This is seen as Chinese struggle to find a new growth model with their economy shifting towards consumer and services one from manufacturing and an investment one.

Looking at financial markets George Soros warns of major similarities to 2008 crisis. This isn’t the first time that he warns of a crisis similar to that of 2008. This warning cannot be ignored or taken lightly more so as it comes from a man whose hedge-fund firm has managed to make an average of 20 percent each year from the year 1969 to 2011. He is also well known for his skills in investment like back in 1992 when he made a 1 billion after betting that U.K. will be forced to lower the value of the pound. According to Bloomberg Billionaires Index, George Soros has a net worth of 27.3 billion. For more information on Soros take concerning China’s economy click here.
He was born in 1930 in Budapest, Hungary and later fled to England following a communist regime in his mother country. He’s an alumnus of London School of Economics and later after graduating he moved to U.S. to start his career in New York. He founded an International Investment Fund, which helped him accumulate his wealth.
He’s also a philanthropic giver which led him to start an Open Society Foundation in 1979. The aim of the foundation is to fight for human rights for all, have a transparent system of governance and a society where the truth is not monopolized by individuals. Soros started out by helping black African Students in South Africa attend Cape Town University during apartheid era by offering them scholarships. He also facilitated students from Eastern Europe to study abroad.
Today Open Society operates in more than 100 countries and as of 2011 it had an annual expenditure of 835 million. Soros is also a best-seller author of 15 books that purpose to enlighten readers on how to invest and do business. He has also written articles and essays on systems of governance and economic matters that appear in magazines and newspapers globally.