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The direct income that he'll receive from this book Two commenters now seem to think that Soros wants to sell books for money. No, he's going for his shot of g

The direct income that he'll receive from this book Two commenters now seem to think that Soros wants to sell books for money. No, he's going for his shot of glory--the guy who predicted the apocolypse. Trouble is, everyone's doing that lately...

timr 19y ago
He's going a lot further than the rest: acknowledging that the fundamental driver of economic growth for the past few decades (cheap money) is unsustainable. Most people are predicting bad things about the housing market and the credit system, but stopping short of analyzing the implications; Soros is one of the few people taking the next logical step.
- trevelyan 19y ago
  It's worse than that. Soros is saying that "cheap money" in the US has been caused by a ponzi-scheme in US asset markets. Capital inflows pushed up prices and attracted more investment, which pushed up prices and attracted more investment... Now that people are taking money out prices will fall and obliterate a lot of wealth that exists only on paper. There's no question that what he's describing has happened. The real uncertainty is over the scale. This could be very significant, or it could be insignificant. Soros is implying that this sort of speculative investment dominates US markets and is the reason the USD hasn't followed fundamentals for the last ten years. Not much mention of this in the news, but Hong Kong and Singapore have just adjusted their basket peg to the USD. Reduced demand for USD by major debt-holders means reduced demand for USD assets.
  - wallflower 19y ago
    Also China has hinted at using its $900bn in US Treasuries as political ammunition
    - yummyfajitas 19y ago
      Unlikely. Debt we owe china is leverage we have over them. If they tried to use it for political purposes, all we need to do is say "we're not paying." For bonus points, we can also say "100% tariffs on chinese goods." All of a sudden, $900 billion of China's assets are toast. This will hurt their credit rating as much as ours (do they have any collateral anymore?). Debt between nations is not the same as debt you owe to the bank.

timr 19y ago

He's going a lot further than the rest: acknowledging that the fundamental driver of economic growth for the past few decades (cheap money) is unsustainable. Most people are predicting bad things about the housing market and the credit system, but stopping short of analyzing the implications; Soros is one of the few people taking the next logical step.

trevelyan 19y ago
It's worse than that. Soros is saying that "cheap money" in the US has been caused by a ponzi-scheme in US asset markets. Capital inflows pushed up prices and attracted more investment, which pushed up prices and attracted more investment... Now that people are taking money out prices will fall and obliterate a lot of wealth that exists only on paper. There's no question that what he's describing has happened. The real uncertainty is over the scale. This could be very significant, or it could be insignificant. Soros is implying that this sort of speculative investment dominates US markets and is the reason the USD hasn't followed fundamentals for the last ten years. Not much mention of this in the news, but Hong Kong and Singapore have just adjusted their basket peg to the USD. Reduced demand for USD by major debt-holders means reduced demand for USD assets.
- wallflower 19y ago
  Also China has hinted at using its $900bn in US Treasuries as political ammunition
  - yummyfajitas 19y ago
    Unlikely. Debt we owe china is leverage we have over them. If they tried to use it for political purposes, all we need to do is say "we're not paying." For bonus points, we can also say "100% tariffs on chinese goods." All of a sudden, $900 billion of China's assets are toast. This will hurt their credit rating as much as ours (do they have any collateral anymore?). Debt between nations is not the same as debt you owe to the bank.