THE FULL GEORGE SOROS SPEECH
23 June 2010 by Cullen Roche
51 Comments
This is a must see in my opinion. Superb comments by George Soros in Berlin today. He covers the continuing global credit crisis in great detail:
Source: Bloomberg TV
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Comments
Excellent talk, and I agree with Mr. Soros. Unfortunately, if Mrs. Merkel’s recent comments are any indication, Germany is going forward with its plans to discipline the great unwashed south of Europe, and we will all feel the consequences in the coming years.
At the beginning of 2009, his opinion for the financial system was so pesimistic so that so many novice speculators thought he would go short. But he went long in 2009 by making billions. He had purchased US bank shares. In 2008 he was in a short position. In this round trip speculation he was one of the top 10 earners in the world. I think what he says is right. But the point is what he has invested in right now.
i believe him to be the ultimate head-fake man, ts ……other than maybe kobe bryant.
I think you are correct on your parasite call. Their agenda is obvious, but for the average person the solution is difficult to comprehend. I pray America can withstand their assault.
Let us resist associating ethnic groups with particular thought patterns. Besides being unjust in many individual cases, it is irrelevant. We are or should be engaged in a battle of ideas not persons:
For our struggle is not against flesh and blood, but against the rulers, against the powers, against the world forces of this darkness, against the spiritual forces of wickedness in the heavenly places. Ephesians 6:12
Pragcap: I’d suggest you delete the absurd, paranoid, anti-semitic rant by SUCKINGMASCHINE. To those who have ‘approved’ his comment: you should be ashamed of yourselves – grow up.
Ts: agree that one has to assume such an investor will just be talking his book (a la Bill Gross).
Agree with Anders on Suckingmachine.
It seems that one of the resident bigots was offended by your comment and expressed his displeasure by giving you a single star. If I were you, I’d take that as a compliment, as you apparently struck a nerve.
Fortunately, the internet is not a accurate reflection of the real world. The wackos are grossly overrepresented on the internet. Funny, given that it was subsidies from the government of the United States that helped to create it…
Funny, given that it was subsidies from the government of the United States that helped to create it… Angry MBA
I’ll bite whatever hand feeds me if it took from me in the first place or even if I am a net beneficiary if it is wrong. My allegiance to the US is to correct it if it is wrong and risk its wrath.
Agreed. The racism in that post is over the top, and it’s amazing that anyone could possibly agree with that tripe. The recession has obviously brought the nut jobs out in force.
The recession has obviously brought the nut jobs out in force. Angry MBA
Yep, that’s one of the dangerous social consequences of the unstable money-for-debt scheme otherwise known as fractional reserve lending. And while we’re at it, even lending at interest with existing money is undesirable:
“You shall not charge interest to your countrymen: interest on money, food, or anything that may be loaned at interest.
You may charge interest to a foreigner, but to your countrymen you shall not charge interest, so that the LORD your God may bless you in all that you undertake in the land which you are about to enter to possess.”
Deuteronomy 23:19-20 (New American Standard Bible)
even lending at interest with existing money is undesirable
You would just love Islamic banks. They follow the Koran, by not charging interest.
Except they can default, too. http://www.ft.com/cms/s/0/13061e36-4bde-11df-a217-00144feab49a,s01=1.html Oops.
You would just love Islamic banks. They follow the Koran, by not charging interest. Angry MBA
Actually Angry MBA, I have a different (?) solution to the problem of avoiding interest or even lending at all, common stock. Common stock would be an ideal form of money, IMO, for the following reasons:
1. No borrowing or lending is required; assets could simply be bought with common stock. This avoids the possibility of deflation via loan repayment.
2. Any price inflation would be born only by the owners of the corporation that issued the common stock since any recipient of the stock would be by definition a part owner of the corporation.
3. Common stock as money shares wealth at the same time it purchases it.
4. Since holders of the common stock can vote, the rate of new money issuance would be controlled by the current holders of it.
BTW, the inspiration for what I advocate is the Old and New Testaments which are the greatest Book on economics ever written.
Gee wiz, he/she who one-stared me, just what do you object to, history or Scripture?
@The excited commentators:
Come on, cool down and just laugh about Mr. Soros!
Mr Soros said: “Germany is globally isolated … Why don’t they let their salaries rise? That would help other EU states to pick up”
What a foolish nonsense! Nobody in Germany can let salaries rise countrywide. They are negotiated between the employers and the employees like in the US.
Laughter is absolutely deadly for the powerful, if applied continuously and consistently
.
Greetings from Germany
soros actually worked for the germans liquidating jewish assets as they fed them to the ovens….he is more antisemantic than you…..i find extreme irony in that……the most irony i have ever seen, possibly.
soros the ultimate enigma
how the left wing sponsor of moveon.org can be such a, well, successful capitalist astounds me……but probably there is a investment angle-head fake to his politics…..i guess socialism will be good for his investments.
i will never believe his politics are anything but selfish as i think he is incapable of anything else.
but all of his speech i listened to he nails it……with the exception of Dr. oliver’s point.
i cannot explain how many of my jewish friends support an administration that obviously would/will leave them twisting in the wind…..human stubborness and fallibility is all that comes to mind.
soros is the smartest creepiest guy i ever saw.
SOROS just something to consider:
http://www.fivedoves.com/letters/march2010/jim315-2.htm
of course, this will elicit rants from the lunatic far left.
There are IMHO other reasons, why Mr Soros (and also Mr. Krugman) is wrong about german deficit spending. The world economy will grow this and next year about 4% according to IMF figures.
http://www.imf.org/external/pubs/ft/weo/2010/update/01/index.htm
Wants Soros to blow up world economy? I think it is wise to reduce deficit spending now and safe money for future financial threats.
And thanks to Mr. Soros, who is a great friend of Germany, and his EURO-bashing the EURO became cheap and will maybe become even cheaper. This boosts german exports worldwide. So Germany will benefit from the economic growth due to Soros
.
All in all, I think Mr. Soros is simply talking about his investments, just like all investment giants. It is said frequently on the iNet that he is short the EURO.
The united states doesn’t have a free wage market -it has a minimal wage law and once the government interferes with the lower wages, the higher ones must follow automatically. Germany doesn’t have minimal wages accept in the postal sector and therefor there wage structure is exactly what the market requires it to be.
Soros is king of Global Macro Investing – end of story. Any attempts at heaping any sort of moral assessment on his character seems kind of pointless to me. Traders by nature are trying to make money – that’s their job. What they do with that money MAY be used to do a moral assessment, but what they do (well) for a living should not. Would you do the same assessment of a solider or a General or a spy?
Philosophy and morals aside, one should be inclined to probe a bit deeper here. Soros makes his money by doing an accurate analysis and then acting to “supercharge” his profit via misdirection to a degree that would make David Copperfield blush. His most famous trade, breaking the Bank of England/crushing the pound sterling, was precisely that – and it involved exactly the same entities that are in play right now. However, he’s so adept, so cunning, so impossible to read that his actual trade could be argued either way though in his mind, there’s only one outcome.
Soros was only able to break the pound because he saw a feeble attempt by the Brits to fight market forces. The precursor to the EURO was the implementation of the Maastricht Treaty that came with the unification of Germany. However, Britain tried to set up for the ultimate exchange by attempting to set the pound/mark exchange rate at 2.7 despite having built up enormous inflation going into the 90s simply to keep up with the mark which had not undergone the same level of inflation. To accomplish this, they had to raise interest rates into the teens but Soros knew this was a pipe dream and happily took the short side of that trade – netting himself $1 billion in a single day when the pound collapsed and causing Britain to withdraw from the ERM.
So what’s going on here? Outwardly, Soros is telling Germany they are destined to fail if they don’t move towards a looser monetary policy. But would Soros be so open about his position? And would the Germans decide to all of a sudden change their culture simply because Soros is telling them to do so?? Both are highly unlikely.
I’ll go out on a limb here and say my guess is that Soros is going long GBP/short Euro. He would certainly have seen the recent passage of austerity measures in Britain as a massive deflationary force on the pound. At the same time, as more shoes drop in Europe, he’ll believe that the Germans will leave the EMU or at least threaten to do so. These simultaneous events would cause a massive divergence in the GBP/EUR exchange rate as the former deflates while the British economy grinds to a halt and the latter hyperinflates on the notion that Germany’s withdrawal wound require the EU to devalue massively to prevent collapse under their current debt burdens.
I’m not even in the same galaxy as Soros and this is just my hunch. But this is a pretty cool trade if you ask me and he’s one of the few people who can pull it off in plain view.
It is the intrusion of emotion into investing such as we’ve in the comments above that allows hedge funds to wring profits fom imbalances in global markets. So, rail away and miss the core message being delivered by people such as Soros. Hedgies will thrive as ethnic and xenophobic knuckleheads feed the beast.
What they do with that money MAY be used to do a moral assessment, but what they do (well) for a living should not. IB
I find that what the rich actually do with their money to be lame at best and often harmful and evil (eg Planned Parenthood). How sad! To be rich and not know what to do with one’s money. At least I would live in a very interesting house not one of their dull mansions.
Soros makes his money by doing an accurate analysis and then acting to “supercharge” his profit via misdirection to a degree that would make David Copperfield blush. IB
Do you mean he lies? There is a eternal place for liars and it is not pleasant. However, I do not accuse Soros of lying; I hardly know of him and it is not for me to judge.
I’ll go out on a limb here and say my guess is that Soros is going long GBP/short Euro.
I really like that trade. (For what it’s worth, I don’t trade currencies, but I’ve liked a long sterling position for quite some time and have been pessimistic about the euro since prior to the Greece crisis.)
But I doubt that’s his reason. I believe that he is sincerely worried about Eurozone stability and the possible political ramifications, as well as the risk of it spreading as a contagion throughout the world economy. I personally don’t share that conclusion — I suspect that the ECB will achieve some political compromise that keeps the currency from completely imploding — but his analysis is otherwise dead on.
The Germans should listen to him, but they are stubbornly fixated on the glory days of the postwar D-mark, and aren’t prepared to take advice from anyone. They’ll act when they’re finally up against the wall, but only reluctantly and then not enough to fully correct the mistake. Soros’ prognosis of weak economic growth in Euroland is a good one.
The Germans should listen to him, but they are stubbornly fixated on the glory days of the postwar D-mark, and aren’t prepared to take advice from anyone. They’ll act when they’re finally up against the wall, but only reluctantly and then not enough to fully correct the mistake. Soros’ prognosis of weak economic growth in Euroland is a good one. Angry MBA
Supposedly a strong currency is bad for exports. However, productivity increases allow one to lower prices without lowering wages. The Germans are plenty smart and I’d bet their factories are very efficient. So, ideally they could lower their prices to maintain exports while maintaining a strong Deutch Mark to purchase imports with. But if they needed to weaken the Deutch Mark then they could buy useful commodities with it, not just waste it as Soros seems to suggest. I’d bet on the Germans over Soros.
Oh, don’t get me wrong – I’m not saying that Soros isn’t being genuine in what he feels (or that he’s intentionally trying to derail the world). If anything, his PHILANTHROPIC efforts to the tune of $6 billion plus in Eastern Europe and Africa since 1970 prove that’s not his goal (emphasis added here simply because I didn’t want to justify the post directly above yours with an answer…). However, what one would prefer to happen and what one believes will happen can often be in direct opposition. Soros will try to “educate” the Germans, but I suspect he knows them well enough to make a hefty profit regardless. Knowing him, he’ll probably turn around and spend a large portion of that money on educating Europe on the benefits of an free floating currency.
I can see where the Germans are coming from – their culture is based around austerity and it must be quite maddening to see the rest of the Union gambling away money so irresponsibly. This is analogous to how the savers feel here in the US, being punished for their responsibility while the gamblers are rewarded. And though the fundamental glue of a “union” is to agree to compromise on terms that benefit all (meaning Germany should allow more leeway), Germany is somewhat correct in the sense that the EU was established to not only be more competitive with the dollar, but also to not engage in the same displeasing excesses that come from the US culture. Of course, they’re certainly willing to profit from our excesses, which leads me to believe they’re deep down green with envy, and perhaps even carrying a small chip on the shoulder – but that’s an entirely different conversation.
This is analogous to how the savers feel here in the US, being punished for their responsibility while the gamblers are rewarded. IB
My attitude toward savers has changed. Certainly they should not be cheated as they currently are by artificially suppressed interest rates but in the parable of the talents (Matthew 25:14-27) lending at interest (supposedly to foreigners not fellow Hebrews) was the LEAST acceptable form of investment. But lending at interest to one’s fellow countryman was forbidden so savers are somewhat suspect anyway.
Soros will try to “educate” the Germans, but I suspect he knows them well enough to make a hefty profit regardless.
Totally agree. He’d be willing to leave money on the table by helping them, but he knows that he won’t have to.
I can see where the Germans are coming from – their culture is based around austerity and it must be quite maddening to see the rest of the Union gambling away money so irresponsibly.
The Germans are trying to impose their needs upon other member states that don’t have the same needs. That’s not a smart way to operate a shared currency; an effective Eurozone should have a policy that serves the needs of the collective, even if that requires compromises among the members.
I also find the Germans’ moralistic tone annoying. They profited from the extra exports and lending, both of which were effectively subsidized by the euro. They have a lot of nerve to point fingers, when they were complicit in the whole thing.
I agree that the Euro itself is a distortion to the market and countries should have there own currencies but your acting like Germany forced it on the others. The contrary is actually true, France pressured Germany to go the euro way after unification because it would allow them to issue more control over there largest competitor. Ultimately they thought appreciation of the euro would cripple Germany’s export sector and this scheme blew up in there faces. Germany defended itself while allowing the southern countries to experience never seen before growth and credit liability. It was a great chance for the PIIGS states to invest wisely for they wouldn’t have gotten the credit with there weak original currencies , it is there responsibility that they didn’t use it for sustainable investments and chose to party instead.
I agree that the Euro itself is a distortion to the market and countries should have there own currencies
You certainly aren’t agreeing with me.
I never claimed that the euro should be dismantled. What I am pointing out is that the ECB is mismanaging the euro by operating it as an extension of the D-mark.
France pressured Germany to go the euro way after unification because it would allow them to issue more control over there largest competitor.
Thanks for trying to rewrite history, but no. Helmut Schmitt helped to spearhead the creation of the euro. Germany helped to engineer the whole thing.
The German moralizing is ridiculous. When times were good, the Germans benefited from the euro, getting the upside of the trade deficits of nations such as Greece, and feeling pretty damned pleased about it. But now that the cracks have been revealed, the Germans have a sudden change of heart and wish to complain as if they are victims, when they are simply the other side of the same coin.
If the Eurozone is going to have a European Central Bank, then the ECB should reflect European interests, not just German interests. A common currency needs to reflect the requirements of the entire zone, not just a single country in the zone.
There is a big difference between what politicians publicly say to convince populations for there agenda and what happens behind the scenes. Id recommend doing some more research on the euro to understand this. The Book
The Euro: The Politics of the New Global Currency by D Marsh would be a good start as it quotes German secretaries and politicians on what really happened.
>The German moralizing is ridiculous. When times were good, the Germans >benefited from the euro, getting the upside of the trade deficits of nations >such as Greece, and feeling pretty damned pleased about it. But now that the >cracks have been revealed, the Germans have a sudden change of heart and wish >to complain as if they are victims, when they are simply the other side of the >same coin.
1.The Germans never wanted the euro nor do they want it now. Your assuming things based merely on what politicians claim. The majority is still against the common currency.
2. Nobody is forced to buy German products , if they do so on credit they cant pay back then that is there own fault. Maybe thats why its called “Default” haha.
3. Germany lend less credit to the PIIGS states than France for example, to assume that over lending was Germany’s fault is therefor ignoring everybody else who gave credit.
4. As a euro critique i can only say that the PIIGS states wouldn’t have gotten so much credit with there own currencies in the first place and the exchange differences between them and the Deutsch mark automatically balances trade surplus out but without individual currencies that mechanism is gone.
5. The “moralizing” is non existent , there is just a opinion that is contra to the Keynian Knights riding the planet currently. Obviously based on your own criticism of lending to the PIIGS states, you should realize that the Krugmann / Soros Approach was EXACTLY THAT and the outcome is history so it is correct for Germany to not repeat that strategy and reduce debt. Greece is proof of Keynesian failure.
>If the Eurozone is going to have a European Central Bank, then the ECB should >reflect European interests, not just German interests. A common currency needs >to reflect the requirements of the entire zone, not just a single country in >the zone.
The ECB’s “quant. easing”, the Bailout of Greece and co is defending European interests and not just Germany’s.
Supposedly a strong currency is bad for exports.
It usually is. But in this case, many of the Germans’ trading partners are also using the same currency. That gave the PIIGS excessive spending power, borrowing capacity and asset appreciation, all of which took a bullet during the financial crisis.
The problem with the euro is that isn’t really a pan-national currency, but mostly a D-mark with a new name. Which really means that the PIIGS have not had a currency that reflected their own economic status, but have instead been using a currency peg.
Currency pegs generally don’t end well, because the powers that be will typically fail to adjust the peg downward quickly enough to reflect market reality. What you are seeing now is the market’s recognition that the peg has failed.
For the euro to work, the monetary policy needs to serve the whole, instead of just a couple of countries that make up part of the Eurozone. That’s the problem that Soros is addressing, and he is absolutely right. The refusal to see it is political blindness, not economic sensibility.
One thing that I neglected to mention is that the impact of the euro “currency peg” is that in this case, the power to adjust the peg is not held by the country that is on the peg.
Typically, a country that uses the peg has to power adjust it, but then they experience problems when they fail to act — they get addicted to the short-term benefits of easy money and don’t want to give that up. Argentina provides a good example of this; the Argentines had the power to adjust the dollar peg downward, but they didn’t want the inflation and lifestyle changes that would have imposed, so they waited until the market forced them to change.
But in the case of the euro, that control over the peg doesn’t belong to the PIIGS, but to the Germans. Unlike the Argentines, that didn’t need the US’ permission to save themselves, the PIIGS need the Germans to acquiesce. But the Germans carry significant cultural baggage, couple with a moralistic superiority attitude, that makes that acquiescence difficult.
So in some ways, this is actually worse than the Argentina crisis. Fortunately, it isn’t as bad quantitatively, so the actual financial impact won’t be as negative, but the politics are sticky.
Unlike the Argentines, that didn’t need the US’ permission to save themselves, … Angry MBA
Huh? Please expand on this?
The Argentines decided unilaterally to peg their peso to the US dollar, at an exchange rate of their choosing. They could have prevented the implosion simply by choosing to change their peg, but they didn’t.
In this case, the euro floats in the market. The euro itself isn’t pegged, but the PIIGS relationship to the euro is implicitly pegged, because the currency’s value reflects the economies of other stronger countries such as Germany.
So it’s like a peg, in that it piggybacks on a stronger economy. But unlike a peg, the weaker countries don’t get to choose the value of the peg.
To control the value, the PIIGS would have to control ECB monetary policy. But they don’t. Even though the ECB is theoretically a pan-European body, it acts in practice as an extension of the German Bundesbank.
For the PIIGS, this is the worst of both worlds. In that sense, the gold standard analogy also works.
The point here is that this whole thing is now beyond the control of the PIIGS. They aren’t Germany, yet they are being expected to behave like Germany, even though their economic bases are quite different. Given their relative positions, that expectation is not sensible; there is no one-size-fits-all economic policy that works for everyone.
The analogy to Argentina is that the Argentine peg and the PIIGS quasi-peg were initially appealing to both because they made imports cheaper and lowered borrowing costs. But whereas you can’t blame the US for Argentina’s failure to manage its peg — that was totally in Argentina’s control — you can blame the Germans for trying to throw their weight around.
F, i believe he is saying that since argentina pegged THEMselves to the dollar,they controlled that,as do the chinese……..in the case of greece, they must have the Germans sign off on any currency changes(what would that be?)…..all they can do is get austere—not very much fun or popular and maybe too late to help.
That’s it, you got it. Thanks.
Thanks Angry and Boatman. I appreciate your efforts to educate.
Mr. Soros has one agenda and that’s to see that he makes money and a lot of it. He understands quite well that there must be chaos in order to make money. He goes to great lengths to help create chaos. He is, in a nut shell, a crook and a despicable human being. Hugh Hendry is correct when he says Soros is a Socialist.
amen, RSD
let me get this straight……gold is evil, idolitris and ruins the environment, but even though i agree with Soro’s speech,mostly, Dr. oliver’s input well taken, we shouldn’t even bring up on an investment site the fact that soros and his god father helped the nazis liquidate jewish assets during the war? its a fact he admits….i’m not even jewish and i think this is worth at least a mention….i guess i shouldn’t say he’s creepy either?…..well he is.
liberals are oh so good at talking out of both sides of their mouths.
“liberals are oh so good at talking out of both sides of their mouths.” boatman
Me a liberal? Then where are the good looking women?
well, F, of course that was not directed at you,didn’t really have you pegged as a liberal really…..i believe more than 2 mentioned censure…..i don’t keep track of who says what really.i just respond to what is said.
back in my save the world days,we definitely had all the good looking women……but times have changed…..and so have i…some anyway.
nowdays its money gets their attention mostly,but not always,my observation….i let my ten year old pickup truck weed out the ones that need to be weeded out.
i appreciate your humor.
good afternoon
Boatman,
Cheer up bro,
I’m 59 myself and have not yet begun to live. May the Lord bless you.
Ah, women. The Lord might rebuke a man for loving gold but how can He rebuke a man for loving women? Solomon, the wisest man on Earth, was not immune to them and that is my hope.
Samson loved the women too and it cost him his eyes but not his soul.
David murdered for one (after all else failed) but yet the Messiah is one of his descendants.
i now know you are not saying that i love gold….tho some others might take that from it.
women have cost me, but not an eye, and its gonna take some guy coming thru my window at night to get shot….
i’ve never been married,i like them too much to ruin a good thing,tho that doesn’t HAVE to be the case, it just usually is……i’ve just driven enough friends home from divorce court to get the picture.
i’m 6′ 2″ jog 3 mi/day,have 2 boats n all my hair and still surf at 61…..how do you think i’ve done/do in the women dept.? …..he said as he closed his eyes and said something very private, softly, to whoever listens when we do that.
Good for you Boat. I suspect you are honest and what more can be asked?
F, i’m so honest i’ve never been invited to a wedding, outside my immediate family…n i know alot of people…i am the politicly incorrect posterboy can’t help it…..i try to take a step back here….TPC sets the tone……just as in a business, the jist comes from the top down.goodnight sir
Frequent reader of this interesting and at times very “amusing” blog.
A short questions for the plenty EUROphobes around:
The EURO was introduced at a rate of about $.85. Why, after all the negative news, and in the face of close-to-death predictions of many here, does the EURO still trade at about 45% over that initial exchange value? Is the market wrong, or are all the EURO-short “analysts” wrong?
Some enlightenment is highly appreciated.
Thanks,
joe
The EURO was introduced at a rate of about $.85.
No, the euro began life at US$1.17.
And it’s just “euro” (not capitalized.)
The 0,85 mark was the current all time low of the euro. And yes that is still stronger than what the Deutsch mark experienced in its best days against the dollar.
So if there is no downfall below 0,75 its good for the Germans and good for all the others as there currency’s were weaker than the mark. In other words, the euro is in no danger, there has only been the usual media hype from the USA because the people who own the media are people like Soros who have lost allot of money with the euro and they can only get it back by speculating on its fall.
Wont happen, the Europeans have completely recognized the economic warfare made in USA.
You are a hater and your saying everything in the world boils down to race and religion. In my book that doesn’t count for much. You are just an anti-Semite. Go back under the rock you crawled out from