Soros sheds further light on why he can fearlessly buy ‘bubbles’, in an interview with Caixin:
Looking back at the past year’s responses to the global financial crisis, Soros says lending by Chinese government-owned banks was indeed excessive, but that regulatory decisions to adjust reserve ratio requirements were appropriate.
“You know now,” he observed, “people see bubbles everywhere.”
Caixin: Do you think there are asset bubbles in China?
Soros: People see bubbles everywhere. Again, there is no question the financial stimulus has pushed up asset prices. Whether that is a bubble or not actually depends on whether it’s going to be a hard landing or a soft landing. If it is a soft landing, then it is not a bubble. If it is hard landing, it will be a bubble. We’ll only know if it’s a bubble or not later.
He goes on to explain how he has grown cautious on China and is waiting to see how things unfold before becoming outright bullish again. He’s probably looking for signs that the government can pull off the soft landing it intends, given his words above.