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Must Read: George Soros
By JD Bluefield | May 19, 2008
With Buffett cominging out of the woodworks, other mega-investors are also speaking out. I read this article on George Soros in CNNMoney and thought it was very interesting and insightful. He’s a billionaire investor and recently come out of retirement because of the current financial crisis.
Question: In your 50 years in finance you’ve seen any number of crises. Why is this so bad?
Answer: Because two bubbles are deflating at once. There’s the collapse of housing prices, of course. On top of that there’s the end of what I call the superboom of credit expansion that has been going on for 25 years. That was made possible by a stable global financial system in which the dollar was the world’s primary currency. Now, for many reasons, the system is in question and nothing has taken its place. That has created great uncertainty.
Q. And for us regular people it means…?
A. The days of rapid financial wealth creation are over. We’re now in a period of wealth destruction. It is going to be very hard to preserve your wealth in these circumstances.
Q. Don’t feel you have to sugarcoat your answer just for my sake.
A. Since the 1980s, the global financial system has been dominated by an ideology I call market fundamentalism - the idea that markets are perfect and regulations are always flawed. But markets aren’t perfect. Left to their own devices, they always go to extremes of either euphoria or despair. The Federal Reserve and other regulators should recognize this, since they’ve had to bail out the markets in crisis after crisis since the 1980s.
They also do a video interview with him, in which he critiques Ben Bernake and the Fed’s performance. Click here to see it.
Here is another article on Buffett that describes his search for investments in Europe.
“There’s far more companies that would make sense for us to buy and for them to sell to us in Europe,” Buffett said at a press conference, declining to identify possible targets. “In emerging markets there are going to be very, very few businesses that would be earning $75 million pretax. You want to fish in a pond where the fish are and Europe is a much better pond.”
Berkshire has $35 billion in cash and Buffett, 77, has been looking for places to put it. He’s invested in China, Israel and the U.K., complaining that there’s a dearth of U.S. investment opportunities for a company as large as Berkshire. Berkshire may get more than half its revenue outside the U.S. in 30 to 40 years, Buffett said.
“The U.S. is going to continue to follow policies that make the dollar weaker,” Buffett told reporters at the Berkshire annual meeting in Omaha earlier this month. Americans’ preference for foreign goods causes the country to send about $2 billion in “IOUs” and assets abroad every day, pressuring the dollar, he said.
Buffett said today the strength of the euro wouldn’t deter him from making purchases in Europe.
Click Here for full article.
Topics: Investing, Personal Finance |
2 Responses to “Must Read: George Soros”
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May 19th, 2008 at 8:52 pm
I admire Warren Buffet. He has been open and forthright in his dealings. The opposite is true of George Soros. Soros is a man who would help with the destruction of the dollar if he could make a penny more. Soros cares only about himself. Millions suffered because he destroyed the Indonesian currency and he made his billions.
May 19th, 2008 at 11:47 pm
I agree, Buffett has helped many people gain wealth. Soros, Ichan and the like are only out for themselves.