I’m taking a brief break from answering readers’ questions (if you still have some you can leave a comment or send me an email) to feature the comments of billionaire George Soros. Soros made some very, very interesting comments yesterday concerning where the world was in the ongoing financial crisis. I feel it is important to share them because they are unlikely going to appear in your newspaper or featured on the websites you visit.
Before I get to Soros’s comments I want to explain why I am featuring Soros’s comments.
- As I mentioned, Soros is a billionaire. Soros made much of his fortune speculating in currencies. In order to be able to speculate in currencies and be successful at it a person must have a very firm grasp of how the financial markets work, how economics works, and have a high-level of analytical skill. Although you may not agree with Soro’s politics (he’s a known financier of left-wing political organizations), he knows what he is talking about when it comes to what is going on in the financial markets.
- The other reason why I am featuring Soro’s comments is that he may have some connections that may give him a better idea of what is going on in the world than the average person… I won’t go into any specifics to be on the safe side, but I am pretty confident that a billionaire like Soros knows a few more influential individuals than we do…
Soros proclaimed that “the collapse of the financial system as we know it is real, and the crisis is far from over”. Soros later characterized what is going on now as the beginning of “Act II of the drama”. Soros cited the debt crisis in Europe as a preview of what is going to occur throughout the rest of the globe. He even compared the world economy to the 1930s…
I take Soros’s comments very seriously and view his comments as confirmation that the crisis that began in July 2007 has entered a new phase and is far from over. The problems in 2007 and 2008 were mostly contained within the banking sector of the global economy. The bailouts that governments around the world engineered simply prolonged the crisis and transferred the problems from the banking sector to public sector (government). We are now beginning to feel the impact of all this government debt that was created in the past couple of years in an effort to prop up the banking sector. We are seeing the return of financial stress and the return of volatility (wild movements in the value of assets like stocks) as investors realize that many governments around the world have accumulated too much debt.
I also agree that what is happening now is going to eventually lead to the collapse of the financial system. Many governments, including the U.S., have debts and future obligations that they cannot possibly meet. No matter how governments choose to deal with their massive debts and future obligations, it’s going to end badly.
