Now Entering Russ's World
Billionaire humanitarian, social activist, liberal political supporter, and hedge-fund investor, George Soros doesn’t mind telling the world what it doesn’t want to hear. At a recent forum in Sri Lanka and another in Davos, Switzerland, Soros was in rare form. While most American economists are painting a bright economic picture in The U.S. thanks to unprecedented car sales and home improvement spending last year, Soros told Bloomberg.com that the global economy is weak, and it is going to get weaker in 2016.
Mr. Soros has the facts to back up his global recession theory. China, the largest contributor to the global economy after the United States, is on life support. The Chinese government is quietly injecting capital reserve money into their economy to keep their stock markets on facebook.com open and to prevent a major devaluation of the yuan. Soros believes the yuan will drop in value against the dollar in 2016 regardless of China’s efforts to manipulate it. Soros also said China’s manufacturing sector is in bad shape too. China is having a hard time competing in industries it dominated for the last 20 years.
In the Bloomberg.com article republished by NYBooks.com, Soros said Europe is also in for a very rough 2016. Recession is prevalent in several European Union member states, and several more are one step from it. The migration crisis has added additional stress to the EU, according to George Soros. Most EU members have closed their borders, and they don’t plan to open them as long as refugees from the Middle East are knocking on their border doors. The EU tried to make a deal with Turkey to take the refugees, but Turkey wants more from the EU than it’s willing to give.
Emerging markets like Brazil, Russia and South Africa were the first countries to feel the wrath of another great recession, and Soros said the United States is in more trouble than the Feds say it is. The U.S. economy only grew by 1.3 percent in 2015. Consumer spending drives the U.S. economy forward, but spending is off too. American manufacturing is currently in a recession, and there’s little hope it will recover anytime soon.
When all those issues are put together, and the economic conditions in Asian countries are added to that mess, Soros said the world is in a recession now. China isn’t going to recover fast enough to reverse the contractions, and the United States doesn’t have the ingredients it needs to fill in for China. Mr. Soros said this new recession will feel worse than the 2008 Great Recession and when all his points are considered he may be right. Soros has an impressive track record of being right.