SOROS: WE ARE IN A DOUBLE DIP RECESSION
22 September 2011 by Cullen Roche
21 Comments
Few people have nailed the recurring credit crisis better than Soros. Most importantly, his global perspective provides him with a unique outlook for the entire global economy. In an interview with CNBC yesterday Soros made some blunt comments:
- The USA is already in a double dip recession.
- The USA needs more fiscal stimulus.
- Europe could experience TWO or THREE periphery defaults. They would most likely remain in the EMU and default would be controlled. Uncontrolled default could result in defection.
- The Euro currency should remain fairly strong even in the case of defaults.
- The European leaders are way behind the curve here.
- A form of a central Treasury is required in Europe
- This is a “more dangerous” situation than Lehman Bros.
- The EMU will do what it takes to hold it all together.
The full interview is below:
Source: CNBC
Pretty much covers it, doesn’t it?
Think we’ll get any action from Boehner, et al? Nope.
Think Obama will “National Security” the economy? Nope – but it’d put the GOP on notice that he’d finally grown some cajones.
You know, I sit here in the MMT camp feeling like we are all alone in advocating for more stimulus, but the fact of the matter is tons of people from all over the economic and financial spectrum want more stimulus.
There needs to be some sort of political advisory consortium of business people and economists that can publish statements, influence the media, and contact DC as an overwhelming force in advocating for proper policies, at least during emergencies like these. Instead what happens is you have uncoordinated pro-fiscal stimulus coverage in the media that ends up appearing sparse and thin relative to what is coming out of the political parties. Imagine if 100s of the world’s most successful investors and prominent economists signed onto press releases/letters/media apperances advocating for fiscal stimulus ALL THE TIME.
I feel like something like this could have made a huge difference in the debate and how DC is handling the Lesser Depression.
Pitchforks and torches (or tar and feathers) seem to be the only indicators politicians are able to read – historically speaking of course.
Well if the lay person is constantly inundated with expert opinion advocating for stimulus, you will drive popular opinion in that direction, which threatens pitchforks and torches.
everything seems correlated, even gld.
i have stocked the bunker with campbell’s tomato soup. will raise my head early november and have a look see.
europe is in a box that i dont see them getting out of before things get a whole lot worse, and the market just told us that ben is out of bullets.
haven’t been this negative since i got out of the market late 2005. then i was just in cash. now i’m seriousy short.
hey cullen, do give us a shout out when laclan says the leading indicators are perking. it will happen one day (i think…)
Forget “stimulus”. The entire population, including savers, should receive equal bailout checks. That way no one could complain about “wasteful government spending”.
And if the bailout was combined with a ban on any further bank credit creation and the bailout checks were metered to just replace existing credit as it was paid off then the total money supply (base money + credit) would not change. Hence there would be no serious price inflation risk.
But since doing the right thing will probably be the last thing we try, I won’t be holding my breath.
I assume that your proposal is a mental exercise rather than a real suggestion, but still your point is worth considering. In my view stimulus resulting in new jobs is much better than checks to everybody. With new jobs you directly attack unemployment and the money spent gets proportionally more to people with a higher propensity to spend it, i.e. the currently unemployed. Moreover you decrease the chances that the unemployed will become unemployable. As for banning new credit creation, this is impossible to achieve as a) a lot of credit is in flexible credit lines (such as non maxed out credit cards, untapped home equity in flexible loans, margin accounts with brokerages etc.) and b) why would you want to prevent new promising businesses get financing anyway? New credit should be encouraged, not banned, it’s just that the criteria for extending it should be scrutinized (i.e. no McMansions for strawberry pickers).
why would you want to prevent new promising businesses get financing anyway? theta
Genuine loans of vertical money would still be allowed and the bailout checks would provide adequate amounts of that vertical money. Also, new businesses could finance themselves with common stock sold for that new vertical money.
There is also the moral problem with so-called “credit” creation by the banks. It is essentially government backed counterfeiting disguised by the so-called “assets” on the banks’ balance sheets. It’s time we abolish that or at least remove all government privileges for the banks such as the Fed and legal tender laws for private debts.
But I won’t hold my breath.
Unfortunately, he prefers to talk like politician, not like investor. The question is, will the US get more stimulus under current congress? Will EU get central treasury? Will the defaults in Europe be orderly?
I think the probability of these events is not high….
I really don’t trust the likes of Soros when they step onto a soap box, because it’s far more likely that they intend to manipulate the market according to their own interests instead of informing the public.
I don’t trust Soros at all. He is running his own covert foreign policy, for instance.
http://www.forbes.com/sites/richardminiter/2011/09/09/should-george-soros-be-allowed-to-buy-u-s-foreign-policy/
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Ok fine…you think it’s ok to solicit this black box here.
Really…you posted here under the name of a female about 2 months ago pushing the same thing. This is the second time Ive seen you post under Jerry 0 this week.
Nothing like a trolling blog cold caller..
Jerry, may I see your Club card please?
I love this place…
We get surprisingly few blog spams here.
BTW, gold stocks are getting hammered along with everything else, at least for today. Haven’t lost all of my gains yet…
Roger-
i read your comments re: mortgage refinance on a thread yesterday? i think.
Good stuff and helpful.
yes..great day..were closer today to better valuations.
I do have one problem child….my EM trade 9/6/2011 is underwater like a house in Riverside.
Ahhhh don’t you just love taking a walk with Mr. Market in September and October. I suspect they’ll be alot of children wearing pillow cases as ghosts like in 2008 coming to my house. Mabe I’ll dress up like Ben Bernanke and write QE on my candy bowl…and hand out some sugar stimulants.
wish i would have bought gold miners in may when soros did.
of course george, being the sponsor of moveon.org is going to promote another partisan wish list disguised as stimulis.
i would go for some REAL stimulis…..but all you get out of politicians is politics….the closer to the election the more of it.
george is letting his politics cloud his vision on another point…the EMU does not go fiscal or solve anything….the euro is dead toast walking.
great reset getting closer by the day now.
we are going to get the banks ‘swedishized’ the hard way…….better than not at all…..
Hmmmm Blog Spam. IBM needs to unleash Watson on the Internet. That would fix Spam. You abuse your freedom – you lose your freedom.
What was Obama thinking? Check this Ron Suskind interview on the Daily Show and it kind of gives you an idea of what really happened:
http://www.thedailyshow.com/extended-interviews/397521/playlist_tds_extended_ron_suskind/397486
The problem with more stimuls where it is actually more needed at the epicentre of the cuurent debt issues is ideological therefore it will not appear until AFTER an event makes it a political perogative.Without the ,in this case Austrian/german ideological barrier we could see earlier, but that is not the case here so we are in accident must happen mode followed by fix it mode.
Stimulus means more money for “”Wall Street”". AnD the folks over there aren’t going to invest that money into losing situations. Like US real estate. In effect Soros is asking for a bailout. Hugh Hendry calls this Soros a “”socialist”".