Soros sees no bottom for world financial "collapse" [Reuters]

reuters.com/article/newsOne/idUSTRE51K0A920090221

Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis.

Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union. . . .

“We witnessed the collapse of the financial system,” Soros said at a Columbia University dinner. “It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.”

His comments echoed those made earlier at the same conference by Paul Volcker, a former Federal Reserve chairman who is now a top adviser to President Barack Obama. . . . “I don’t remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world,” Volcker said.

I’ve seen some charts on The Rachel Maddow Show on MSNBC which gave graphic illustration to part of this. Her show is informative for a lay audience. CNBC and Bloomberg is informative as well.

In my opinion the DJIA may drop below 7000 and may even drop below 6000. This is just my opinion; it is not investment advice.

I was considering buying some Bank of America stock, which was at 50 and now is at about 4. Do you say that this is a bad investment? I don’t see how it could go much lower?

I’d say any investment in anything may soon be meaningless. We can’t afford the stimulus bill. No one knows anything about how it is supposed to stimulate the economy. The people creating it have no experience in anything related to managing economies or business. It has been created in such a short period of time that it is unlikely to rationally consider its priorities. Spending money recklessly and printing money is what Zimbabwe does. :frowning: I don’t know if that is what we are doing now. I don’t know if that is not what we are doing now. I would LOVE to know where the money for the stimulus bill is coming from. :o :confused: :shrug:

Yet, nationalization of companies (as we are talking about now) is what developing nations do and are criticized for doing by economists. State-owned enterprises (as the economists call it) are centers of corruption and they don’t tend to work because the public sector has little incentive to manage its resources smartly in the same way that the private sector does. :frowning:

I’m not qualified to give investment advice and even if I were, I’d have to know all your particular circumstances to do so.

I can say that I would not make any investments without consulting your wealth management advisor.

There are reports that some in the business did not care about their clients and were just high off all the money they were making. So make sure the company and your personal advisor are trustworthy.

Generally though, it’s important to hedge your investments. Even putting everything in U.S. treasuries may not be safe. This crisis is big, but some say an even bigger one is coming. IIRC, on Monday there is a meeting of some kind in the U.S. to help address the looming fiscal crisis which in the course of the next 10-40 years could lead to ballooning interest rates and in the worst possible case scenario, the collapse of the dollar. So I would keep some portion of your portfolio in gold and not just equity in gold-related companies, but ETFs. In the absolute worst case scenario, governments may not honor the ETFs and due to that fear, some have chosen to procure physical gold and store it in vaults. But unless you are super wealthy, other things may be more important.

This is not investment advice. I am speaking generally and in my opinion. I am not a professional investment advisor and more importantly, I am not yours.

It’s all debt-financed. The debt may be purchased by Americans or by foreigners. Much of it is expected to be purchased by the Chinese and other Asians. This has geopolitical ramifications. China holds much assets in U.S. dollars already. If China were to flood the market with these assets, the dollar would plunge and we would be totally screwed … and the world along with us. China also needs to be willing to buy more of these otherwise the yield we offer on this new debt needs to rise (meaning it will put even more strain on the budget). So it’s a pretty safe bet that there won’t be, for ex., any armed conflict between the U.S. and China over Taiwan. The leverage we have over China is pittance compared to the leverage China has over us.

So in the long term, we need to correct this.

Some economists say that if debt is all domestically held, it doesn’t matter since it’s just money we owe ourselves. I think we need to restrict the trade of U.S. debt to U.S. citizens.

A minority of economists say we are going about this (on the monetary side) all wrong and that we actually need to raise interest rates. I happen to agree with them. But maybe the current Fed policy will have a placebo effect.

What does it mean to be debt-financed?

So this basically means that China owns us right now? :o :confused: :shrug:

O and but you are right to be worried about printing more money. If we end up printing lots of more money to solve fiscal problems, then that devalues the currency and U.S. debt will no longer be an attractive investment unless the yields go up. That means that when we need to borrow more, we will have to offer higher interest rates. China has warned us not to devalue our currency. If China thinks we’ll do that, they may start selling their U.S. dollar assets.

I think the only way out of this mess is a new international order or working our way toward it. An international governing body in balance with national sovereignty is the way to go.

It means the U.S. issues a bond that will mature and after it matures the U.S. promises to pay the promised value at maturity. How high that value is depends on the trust people have in the U.S. govt. to make good on the promise and how much they think the U.S. dollar (since it is paid in dollars) will be worth at maturity.

In reality, after someone purchases, it can be traded.

Have any of you heard of Mother Shipton?

Where did China warn us of this? Maybe President Obama needs to know that China warned us not to devalue our currency.

Your idea is interesting. I have not heard of it before. I think it is workable now that the racial barriers have largely been broken around the world and thus mutual trust between races may occur. Instead of a United States, maybe it must be a United Countries. :o :confused: :shrug:

Kind of like the EU but it would be for the whole world.

But such problems. The UN strikes me as a paper tiger. And the World Bank? :eek: Can we trust an international body that may be so hard to keep accountable? I hardly trust our national government or our state government. Only the local government do I exhibit much trust in, sadly enough. :frowning:

No, who is Mother Shipton?

George Soros has caused two economic crises; the “Asian Tiger” economic collapse and the collapse of the Bank of England. He is unabashed about it. He made immense fortunes on each. Here’s what he said about his role in the English crisis:

"When I sold sterling short in 1992, the Bank of England was on the other side of my transactions, and I was in effect taking money out of the pockets of British taxpayers. But if I had tried to take social consequences into account, it would have thrown off my risk-reward calculation, and my profits would have been reduced. "

Soros did not act alone in those transactions. He was the lead among a number of very large financial institutions and wealthy individuals. People like this are fundamentally looters. They do not produce anything. They simply cause markets to go up and down so they can profit on the swings. His fortune was built on seeing economic weakness and making it worse.

For some time now, short selling of American institutions and the American economy has been huge. I could be wrong, but I think when all the facts come out (if they ever do) Soros and the super wealthy will be found to be a big factor in the current economic crisis. Right now, depending on which side of things they are on, they may well have an interest in pushing the economy down even further. At some point, they may “go long” or buy up huge segments of the devalued economy.

Barack Obama is George Soros’ man. There is no question that Soros supported him early on and financed his campaign. No one would have thought Obama could have beaten Clinton, but he did. And what would have been the one thing that could have swept the hard left to power in 2008? An economic crisis. It was a near thing even so, but an economic crisis we had…and right in time for a Democrat sweep; a campaign that promised to relieve us of the economic distress that was caused by huge economic swings. From grain and petroleum gyrations to financial and housing asset plunges, and all of it caused, not by failure of the world to produce or to earn, but by perceptions.

Despite his immense wealth, Soros is a socialist. He admits it. He is also an atheist. He is also anti-American in the sense that he disapproves of America’s post-WWII role in the world. He is admittedly a believer in a sort of “internationalism” that places sovereignty in supernational bodies like the U.N.

Whether to believe Soros or not? Well, he sometimes tells it like it is, and he’s no fool. He sometimes has an interest in causing despair, and fundamentally does not believe in the capitalist system as we have known it. So, one cannot be sure when his statements are driven by factual analysis; when they are driven by a desire to cause the kind of despair from which he profits, or when they are expressions of his ideology.

Did he and like minded Robber Barons cause this economic downturn in order to gain political control and further profit from it? We really can’t know right now. But his history and the events of 2008 and 2009 do force one to consider that possibility. If it’s so, we have not only been had, we are in for a very rough ride over the next few years.

It is interesting, and disturbing, to note that Soros stands opposed to virtually everything the Church stands for.

I’m not sure I can say the following well. I am going to try.

Robbers like Soros and people like Obama who seem to want to change the fundamental structure of society, are powerful, and have a keen instinct for knowing how to impart the right amount of distress and fear so people will act in the ways that serve their agendas. But one of the things that counter the psychological pressure such people can put on others is the determination; necessity really, of ordinary people to survive. I am not saying Obama, for example, has no belief that he is the agent of “hope”. (I have no doubt he believes he is the agent of “change”) But it’s “hope” of a different sort than we think. We are being told our only “hope” is in “change”, and so we are being told to “despair” until “change” turns it into “hope”. We are helpless, we are told. We can do nothing to help ourselves. Our only hope is in giving our resources and our childrens’ resources to our “betters”; the elites who keep telling us we’re just not smart enough to make our own way; that the system has been “rigged” against us and that “re-rigging” it their way is our only alternative.

So far, Obama and his people have been selling despair, not hope. They do not cease telling us how desperate our situation is, despite the fact that we can look around us and see that, yes, unemployment is up, house values are down and banks are in trouble, but that we can also see unemployment is 7.5%, most people are still paying their mortgages and most banks are not in trouble.

I have no pretense at being an economist. I only know what I can see. I see people still buying houses. I even see builders building houses…not the McMansions, to be sure, but they’re still building on a modest scale. I see banks still loaning money. Their profits are down, but most are still profitable. I see businesses still in operation. I even see new small businesses spring up here and there. Nobody is buying cars right now because of the downturn and the fear and the fact that nobody needs a new car for quite awhile once he decides he doesn’t need to buy one. I see ranchers liquidating their herds slowly, but I also see prices failing to plummet in reaction to it. So, are they in despair, or are they simply bolstering their financial positions for now? I see poultry producers reducing their output and curtailing their capacities. But only by a little bit. Pet food prices are going up because the secondary products that are human consumable but not the favorites, are suddenly more popular than they were because they’re cheaper. One of our local factories that produces bouillon and the other dehydrated meat products that go into cheaper dishes, is booming with business and running full out, day and night.

The borrowing rate has dropped and the savings rate has gone up. What do those things mean? Are they healthy or a symptom of economic disease? Have people really given up and joined the “politics of despair”, or are they just being prudent, with some temporary adverse consequences flowing from their actions?

People in the U.S. generally favor limitations on abortion and do not favor homosexual “marriage”. Yet, we have a government elected to power that promotes the one openly and the other tacitly. Have people given up?

I, for one, do not think people have truly been sold on the politics of “despair and change”. Not long term. The people who actually produce, I believe, will eventually prevail over those who only redistribute.

So, what does this mean as a practical matter? Well, for one thing, there are perfectly healthy financial institutions out there that are selling for discounts to “book value”, even to “tangible net worth”. There are food processors selling at prices no one could have dreamed up even a year ago. There are equipment manufacturers whose profits presently look dismal, but whose stock will look good even with a modest upturn. There are houses here and there, selling for significantly less than it would now, or ever will, cost to build them. There are building lots being sold for less than it cost to put in the utilities.

Maybe I’m stupid, but I’m buying. Will things go lower? Probably. But not forever. There is no “forever” when it comes to economies.

Everybody talks about the “dot com boom” and the various other booms that really do represent major advances in productivity. Everybody is wondering what the next one will be.

I guess my thinking is that at least one could be in energy. Energy is “substitute muscle power”, and makes a huge difference in economies. I don’t mean energy from corn or algae or windmills or any of that kind of thing. I mean energy from natural resources we know for an absolute fact will work, and that we know are there.

So, those resources are again being “shuttered in” by those, presently elected, who want us to reduce our home heat to 60 degrees and drive roller skates and beg the government to skin somebody else to give us a handout. No nuke plants. No offshore drilling. No shale oil. No new coal-fired plants. Put on extra sweaters and eat ramen noodles sprinkled with a little chicken powder; your $13 check is in the mail to pay for it.

So what is our own course of action? As I said, I’m buying to the extent I’m able. Maybe you can, and maybe you can’t, and maybe you fear to do it, and that’s okay. But I think the course of action of those who want their children and grandchildren to have some control over their own lives, is to oppose these “politicians of despair” with everything in them. Vote against them. Support their opponents. Speak out against them.

(continued)

(continued)

I believe this political machine tests the “waters” all the time. Dodd floated the “nationalization of banks” notion. People reacted against it pretty strongly, so the administration came out and denied they were thinking about it. That is going to happen over and over again. Remember Obama’s statement to the guy who wanted the photo op? “You’re wearing me out, Bro…” Don’t let them wear you out. Wear them out. Wear them out politically, to be sure. But perhaps most importantly, wear them out with your insistence on your own survival and your insistence that you are not going to “change” your values to those of “despair”.

I now surrender the floor.

Ridgerunner,

You may think you do not know much about economics, however, I believe you know more than most of them in Washington. Great post :thumbsup:

Yes, well worth the read.
Critical without getting into the ‘conspiracy theory’ territory.
And it reminded meof where I hear about Soros before he started supporting Obama.

Well done, Ridge!

I think many of us saw the headline and thought, “This cretin should know all about financial catastrophe, he’s caused enough of it” Buy only you did the hard work and provided the history of greed and destruction that Soros brings to the table.

Well done.

I read the first post of RidgeRunner’s and not the second. I am deeply interested in financial matters. Might you please tell me how Soros learned everything he did about the markets? I certainly couldn’t manipulate the markets if I tried. :eek: :eek: How did he figure out how to do so? Who trained Soros? What was his educational background? Did his Jewish cultural heritage play a role in his smartness? Where did he go to school and what did he study when he was there? Who did he study under? Is there a biography that details where he worked after school, how he got the jobs, and what he learned, who he interacted with, who his connections were?

No wonder he supports socialism if he finds it so easy to manipulate the market. For all we know, he might be doing this to cause us to subconsciously turn away from the free-market! :eek: :eek:

Have you read His Holiness Pope Benedict XVI’s paper Market Economy and Ethics acton.org/publications/occasionalpapers/publicat_occasionalpapers_ratzinger.php where he predicted the collapse of an unethical financial system in 1985. It’s a tough read that I’ll have to spend some time breaking down later. :frowning:

Excerpt:

It is becoming an increasingly obvious fact of economic history that the development of economic systems which concentrate on the common good depends on a determinate ethical system, which in turn can be born and sustained only by strong religious convictions. Conversely, it has also become obvious that the decline of such discipline can actually cause the laws of the market to collapse.

Soros makes good points that capitalism can be unethical and can harm the developing countries of the world, echoed by His Holiness Pope Benedict XVI in Market Economy and Ethics

I also fear the rise of anti-seminism in our society, given Murdoch and Soros and Rahm Emmanuel and Israel/Palestine!! :frowning: What can we do to prevent this?

I will try to read your second post later (as you exit your soapbox :cool: ). Also, do you have any of the references to the reading on Korean/Chinese servitude? :cool:

Mother Teresa, “The fruit of abortion is nuclear war. What you do to the unborn child, you do to Jesus.”

I finished reading! Thanks, I have been buying into the policies of despair. :frowning: But isn’t despair at least a little appropriate? It is not just our economy. It is economies all around the world. Was it like this during the Great Depression? Was it just America or all around the world?

Also, there are a lot of Marian apparitions that promise a chastisement. These chastisements and apparitions have been fulfilled in the past. Things will get better.

Rwanda had a genocide and now has the greatest number of women represented for Parliament. Germany survived.

But it strikes me that we may be in a long time in waiting for things to get better, especially with the stimulus that might make any temporary ailment in our society into a long long long term collapse.

Yet, even in the midst of poverty, people can survive. In third world countries, people survive all the time. Obama’s father was from Kenya. Colonial Singapore was thought in the 1960s to have worse economic prospects than most of the countries in colonial Africa.

I will try to post the information on the Marian prophesies of chastisement later.

I also wanted to re-issue the reminder. Mother Teresa said, “the fruit of abortion is nuclear war. What you do to the unborn child, you do to Jesus.” :frowning: :frowning: :frowning: :mad: :mad: :mad: :mad:

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