George Soros on the 'Blah' Economy and China's 'Phenomenal' Rise

Soros on the economy, ChinaWill the fragile global economy continue its tepid recovery, or will it tip back into recession? In the view of famed investor George Soros, it doesn't make much difference.

Soros was asked about the state of the macroeconomy during a Q&A held at the Nasdaq Market Site Wednesday morning and hosted by Thomson Reuters. "If I had to sum it up in one word, I would say 'blah,'" he replied. "It may slip into a double dip or it may not, but it's going to slow down. There's no question in my mind."

The major factor standing in the way of a more robust rebound right now, Soros believes, is the emerging vogue for "fiscal rectitude" at a time when more stimulus is needed. "I think it is premature," he says of the drive to shrink deficits. "Of course, you can't run up the national debt indefinitely. . . . But it's the right policy at the wrong time."

Soros addressed a number of other topics during a wide-ranging, hour-long interview. Some highlights:

  • He predicts the Federal Reserve will attempt further quantitative easing, "but they're very reluctant to do it, and for good reason, because it may not be as effective as the first time they did it. It's the appropriate thing to do, but I don't think it's going to be very effective."
  • "I don't think people realize how serious the financial and economic situation was when it collapsed because President Obama employed the confidence multiplier and actually it succeeded. It made the recession shallower and shorter than it would've been. . . . But the problem with the confidence multiplier is if reality doesn't meet expectations, then confidence turns to disappointment."
  • Soros continues to believe Obama should have demanded the government get equity in the banks it bailed out. "This was a political decision. The other way would've been more effective. But it backfired. Instead of nationalizing the banks, we effectively nationalized their liabilities."
  • He had lots to say about China. "China is the great winner. It's rising very rapidly because the West is sinking. The shift is phenomenal. I have never seen anything like it." He also said, "Until the crunch, the U.S. consumer was the motor of the world economy. Now it's the Chinese. It's smaller, so the world economy has a smaller motor. So it's not running very fast." Asked whether the U.S. should consider trade sanctions against China for manipulating its currency, Soros said, "These things might be destructive. Threatening them might be appropriate, but once you use it, both sides suffer."

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tjstieg

Soros advocates MORE socialism from Mr.O amd congress. Basically wants to establish another oligarchy like the USSR had. Always someone getting rich just a different "IN" group.

September 27 2010 at 4:33 PM Report abuse rate up rate down Reply
Patrick

GREEDY GEORGE BLOWS THE BIG HORN

September 20 2010 at 5:29 PM Report abuse +1 rate up rate down Reply
silva1604

aa

September 20 2010 at 4:30 PM Report abuse rate up rate down Reply
lgnu

George is right about this being a time for more stimulus not fiscal conservatism. If you stick with conservativism you stick with what you have got. Sure the national debt may go down but the economy doesn't grow and no one goes back to work.

September 20 2010 at 1:17 PM Report abuse rate up rate down Reply
ralpsimmons6

What is not slowing down is Sales Tax Hotel Tax School Tax Liquor Tax Luxury Tax Excise Taxes Property Tax Cigarette Tax Medicare Tax Inventory Tax Car Rental Tax Real Estate Tax Well Permit Tax Fuel Permit Tax Inheritance Tax Road Usage Tax CDL license Tax Dog License Tax State Income Tax Food License Tax Vehicle Sales Tax Gross Receipts Tax Social Security Tax Service Charge Tax Fishing License Tax Federal Income Tax Building Permit Tax IRS Interest Charges Hunting License Tax Marriage License Tax Corporate Income Tax Personal Property Tax Accounts Receivable Tax Recreational Vehicle Tax Workers Compensation Tax Watercraft Registration Tax Telephone Usage Charge Tax Telephone Federal Excise Tax Telephone State and Local Tax IRS Penalties (tax on top of tax) State Unemployment Tax (SUTA) Federal Unemployment Tax (FUTA) Telephone Minimum Usage Surcharge Tax Telephone Federal Universal Service FeeTax Gasoline Tax (currently 44.75 cents per gallon) Utility Taxes Vehicle License Registration Tax Telephone Recurring and Nonrecurring Charges Tax Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. We also were A Common Law Country! I have set up a place that the poor and middle class in the country can start to get some of this tax money back. It is our turn to have a piece of the action. Here is my way to get your loot back. Just google EASY STOCK CASH and click the first link. Once you get there, go right to the PENNY STOCK page to see what the rich don't want you to know.

September 15 2010 at 9:32 PM Report abuse rate up rate down Reply
tim

Hey George....blow it out your A$$ !!!!!!!

September 15 2010 at 8:55 PM Report abuse +3 rate up rate down Reply
donut999

time for al franken to write another book.

September 15 2010 at 4:04 PM Report abuse +3 rate up rate down Reply
nywf6439

AOL, do you have any other convicted criminals we don't care to hear from?

September 15 2010 at 2:35 PM Report abuse +2 rate up rate down Reply
Jetncat

THE WORLD GET POORER AS HE GETS RICHER? Hmmmmm something smells in China? Do not trust this man.

September 15 2010 at 2:16 PM Report abuse +4 rate up rate down Reply
Jetncat

THE WORLD GET POORER AS HE GETS RICHER? Hmmmmm something smells in China? Do not trust this man.

September 15 2010 at 2:16 PM Report abuse +4 rate up rate down Reply