Hot Features
Premium
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
George Soros warns of a lack of understanding on how markets operate.
Billionaire investor George Soros has argued that Germany is “out of tune” the rest of the world in regard to the Eurozone crisis and there is a lack of understanding of how the financial markets operate.
Speaking at the World Economic Forum that “established theory has collapsed” about “how financial markets operate” George Soros said that there is no longer “proper understanding of how financial markets operate”.
Arguing that the euro will survive the financial crisis Mr Soros commentated that Germany will do “the minimum” to preserve the currency, and whilst “currencies have been remarkably stable in the last few years” yields of sovereign debt and German led Eurozone austerity policies will lead to “more fireworks, more volatility”.
According to Mr Soros Germany is now “out of tune with the rest of the world” as it still believes in an out-dated theory that it “should be possible to withdraw the additional credit as the economy gets going” and that there remains “a fear this could result in runaway inflation”.
Mr Soros, who became a billionaire through investing, said that “we have introduced synthetic instruments, invented derivatives where we don’t fully understand the effect they have”.
Whilst agreeing that world authorities had been correct to inject liquidity into the world economy to stabilising markets Mr Soros stated that the growth should now be prioritised as “You first regain control and then you correct the direction.”
“The first phase of the manoeuvre is pretty well complete, but the second phase we haven’t yet started”.
