The legendary former head of the Quantum Fund, George Soros strongly criticised the lack of leadership in Washington and Berlin in an interview with Der Spiegel.He says, “The indebtedness of the US is not all that high, but if a double-dip recession was in doubt a few weeks ago, it is less in doubt now [after the S&P downgrade], because financial markets have a very safe way of predicting the future. They cause it.”
And he isn’t shorting the Euro because there’s new demand for a strong alternative to the dollar from the Chinese, who will continue to buy because they want a strong alternative to the dollar.
(Soros made his name by shorting the British Pound in 1992.)
Here are his other main points:
- Soros wants Germany to take more control of the European debt crisis. “In a crisis, the creditor always calls the shots. Sure, this is not a position Germany or Chancellor Merkel ever desired and they are understandably reluctant to embrace it. But the fact is that Germans are now in the position of dictating to Europe what the solution to the euro crisis is.”
- He blames the Euro debt crisis on Angela Merkel’s statement that bailing out too-big-to-fail banks are the business of individual Euro member states, not the European Union.
- Soros supports Euro Bonds and European fiscal unification–provided that the Germans don’t simply expect all of Europe to be Germany.
- Greece and Portugal, he says, should leave the EU, and that the remaining members would be better off for it.
- Soros blames Obama’s yielding to Republicans–particularly, he says that the stimulus was far too small to be effective.