George Soros keeps a careful eye on the global markets. As a former hedge fun manager who earned billions in the financial markets, he is not exactly going to ignore major events. Soros is surely going to stay on top of dangers in the market. Bloomberg reported on Soros’ comments about current market conditions. Soros made his comments at a global economic forum. The comments were downright frightening. Soros fears a repeat of the 2008 financial crisis.
The United States’ banking industry would not be at the core of the financial disaster in 2016. China’s current economic climate is horrific. Unless things turn around, China’s economic meltdown on facebook.com could easily pull other nations into the mix. The relationship between China and the United States offers one example of how things could interconnect.
Along with Japan, China is a major holder of U.S. debt. If China’s fiscal situation became severe enough, the country may be required to require payment on the purchased debt. In essence, China would be cashing in bonds. The U.S. would then be in a very difficult situation. Not paying the debt would damage the full faith and credit of the nation. Surely, the economy of the United States would suffer immensely.
China’s problems seem to be connected to the massive decline in the value of its currency. Soros most definitely is knowledgeable about currency. He traded in currency for years and amassed huge profits. Soros does know currencies can go up and down in value. When down, the damage could be incredibly severe. By the time the value of the currency increases, the massive amount of inflicted damage could be impossible to reverse. Business from around the world with money held in Chinese banks in yuan would discover they have far less capital than what existed previous. Such a scenario would cause serious problems.
Soros suggests things are not at the point in which a financial crisis is impending, but governments have to keep their attention on the situation. Doing so would allow the governments to react quickly and accordingly.
George Soros has issued public opinions to the leaders of Russia and Germany recently on a variety of issues. He is an influential man. His opinions and assessments are hardly to be ignored.