Hmmmm, separated at birth?
Posted on 04/19/2008 12:28:30 AM PDT by TigerLikesRooster
Soros: euro can't replace dollar
Thursday April 17, 12:28 pm ET
By Aoife White, AP Business Writer
George Soros: Euro cannot replace dollar as world's reserve currency
BRUSSELS, Belgium (AP) -- The euro cannot replace the U.S. dollar as the world's anchor currency, billionaire financier George Soros said Thursday, warning that investors are instead fleeing currencies to put their money into real assets. "I don't think that the euro can replace the dollar and a system with two major reserve currencies? Not a stable system," he told a Brussels event organized by the Centre for European Policy Studies think tank.
The U.S. dollar's reign as the "unquestionable reserve currency of globalization" allowed the nation to run up a "chronic" current account deficit that could have continued indefinitely if rising household debt and a slipping housing market had not triggered the current financial crisis, he said.
"What we have now is a period of instability and heightened uncertainty," he said, refusing to "predict the unpredictable" and say when the economy might hit calmer waters again.
"I think that eventually the dollar will re-emerge as the reserve currency, but then the U.S. will have to abide by certain rules that the Washington consensus has been imposing on others but not on the United States," he said.
The U.S. Federal Reserve's efforts to encourage bank lending by cutting interest rates has been "impaired by the unwillingness of the rest of the world to accept dollars," Soros said.
"The euro, while it is obviously an alternative, is not a truly attractive alternative, and therefore there's a general flight from currencies," he said.
"That's how you have the creation of sovereign wealth funds which are basically seeking to diversify from monetary assets to real assets," he said.
These state-owned investment funds can help the financial system by recycling trade surpluses that Asian and oil-producing nations are making out of surging trade with Europe and the U.S.
Soros may be one of the few winners of the subprime housing crisis that brought investment bank Bear Stearns Cos. to its knees and forced many major banks to report billions of dollars in losses on complex investments based on the housing market.
According to Institutional Investor's Alpha Magazine, Soros' Quantum Endowment Fund -- which he no longer manages -- made $2.9 billion last year with returns of over 30 percent.
Soros said he believed that current financial market turmoil was destroying capital and if investors managed to hang on to capital they would be "doing pretty well."
"Either you have to be very very cautious or you have to be very nimble. One or the other," he said.
The Hungarian-born financier is promoting a new book, "The New Paradigm for Financial Markets: The Credit Crisis and What It Means," where he describes the recent financial "superbubble" as the end of an era of cheap finance and loose regulation.
Ping!
If a foreign factory makes a product under an American brand name is it considered an import? If the US company owns the foreign factory or a large share of it, is that also considered an import? How does that affect the trade deficits?
Globalization has turned things on their heads.
Soros can kiss my American dollar.
Un-American sleazeball.
Does anyone else today, look more like Liberace?
U.S. have had steady inflow of foreign money into U.S. financial markets which could offset the effect of trade deficit. Foreigners bankrolled U.S. consumption for some time. Now that link is under threat.
I guess there are some benefits to having George Soros own the United States political class. The Russians were smart. He tried that there and they ran him out of town on a rail.
You know what this means!!! Soros is now looking to go take profits on his short dollar positions (or even go long) and wants to talk it up.
sore-ass ~ an extemely wealthy jimmah carter....anti-semetic/anti-american/pro muzzie terrorist....hell bent on the downfall of the USA!!!
Yes on both questions of imports. If the foreign factory is a 100% wholly owned subsidiary of a US corporation, its products are also considered imports, even though all the profits flow back to the US.
It does skew the actual trade deficit quite heavily...
Love your screen name- Jungle Love, right?
Hmmmm, separated at birth?
If we passed the Fair Tax, it would fix that instantly. Worldwide industry would come rushing back to the US.
Translation? I’ve made as much as I can selling the dollar short, now I have contracts due on the fall of the Euro.
Yea. After he shorted the dollar and made enough to fund the next 3 Presidential campaigns for the Dems.
Soros is an a$$hole but on this I think he is correct. The Euro is not backed by any one country and is backed by nothing but thin air. As far as that is concerned, neither is the dollar anymore.
I guess we will have to go to the Peso.
The only thing about it that worries me is that Soros is such a nut. I am not sure I would rely upon a nut’s predictions.
You’ve got it nailed. He’ll be loaded up on cheap dollars and will now talk the euro down and make a killing. It’s the same game he’s been playing for a long time.
But he’s a nut with a history of being correct (when it comes to issues of Money & Investment).
Thanks,but actually I'm not that hip. I'm going to have to find Jungle Love and memorize it, some people have also asked me about it. "I thought it was from the Wizard of Oz" said I, red faced.
When I worked IT, I usually named applications and jobs something I could easily recognize. I used EIEIO primarily and thought of using that as a screen name, however then people would have thought I was in farming. Another one I used was dobdobdo (do b do b do), God knows what they would have thought I was into then.
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