George Soros is a billionaire that has an uncanny ability to accurately predict how a situation is going to turn out before it happens. While the Hungarian billionaire magnet is not 100% on everything that he says; he has made some pretty bold claims in the past that have come true. As a matter of fact, this is how Soros made his fortune. He accurately predicted that the British pound was going to lose its value back in the early 90s.
When it happened, Soros had set up a deal that would allow him to short sale his savings of pounds at a one to ten rate. He had over 10 billion pounds and made a billion dollars off of the sale. Since that time, Soros has been fairly consistent with predicting what will and will not happen in the world of business and politics.
In January of 2016, Soros provided some insight to business and government leaders about China’s declining economy. Soros pointed out that China is no longer growing like they did in the past. Instead, the nation is losing its position as the second best economy in the world. China’s problems has to do with its consumer driven market that is now emerge. Up until recent years, China had remained strong because it was a producer and manufacturer that shipped trillions of dollars of products all over the world. China is also the world’s leading trading nation.
China’s economy has now switched to a consumer driven model. This means that China is now consuming just as much as it is selling. Businesses know what is taking place and so do the organizations that control the nation’s economy. As a matter of fact, the Chinese people are trying to push China’s currency for more than what it is worth. This is dangerous because it means that China is trying to push more of its debt off to outside countries. This in turn could trigger a global recession.
America’s economy suffered in 2006 and things went belly up from a bloated credit market that did not have anything backing it. The housing situation in America had also contributed to the economic decline. People were being allowed to move into homes who clearly could not afford them. These factors (and a few more) is what knocked the bottom of the American economy which sent negative financial shockwaves across the globe.
Soros wants the world to see that China has to make changes for things to get better. These changes would require that the nation not overvalue its currency. China would also have to put a limit on consumer spending and revamp its manufacturing. George Soros has more to say about this issue in the article George Soros Sees Crisis in Global Markets That Echoes 2008.