George Soros believes the slowdown in China will have a global impact

George Soros is currently the chairman of Soros Fund Management. He is famous for making $1 billion in 1992 when broke $10 billion worth of pounds to the Bank of England on http://www.nybooks.com/contributors/george-soros/. He was born in Budapest, Hungary in 1930 and fled to England after surviving the Nazi occupation during the World War II and Communist-dominated Hungary. He later settled in the U.S. where he accumulated a vast fortune through his investment fund. Refer to http://www.georgesoros.com/the-life-of-george-soros/.

George Soros believes that current markets are facing a crisis that is similar to what was experienced in 2008. According to him, what is happening China is not something to be ignored as the drive of China to find a new growth model and currency devaluation is leading to problems for the rest of the world? He believes that the developing countries have a challenge returning to positive interest rates a situation has similarities to what was experienced in 2008.

All indicators are proving George Soros allegations right as stocks, global currency, and commodity markets are under fire in the first week of January. The Chinese Yuan has been deteriorating at a high rate adding the woes to the China’s economy as the government moves the economy from manufacturing and investment towards consumer driven economy.

Soros believes China has a significant adjustment problem on http://www.cnbc.com/2016/04/12/soros-european-union-in-mortal-danger.html which based on the available economic data amounts to a crisis. What Chinese government is promising, for now, is to increase the Yuan’s convertibility by 2020 and remove the capital controls with time. George Soros is basing his claims on the effect of the China’s economic problems on U.S. stock index futures as indicated by a sharp decline as investors focused on the China’s economic slowdown. Refer to http://www.bloomberg.com/news/articles/2016-01-07/global-markets-at-the-beginning-of-a-crisis-george-soros-says.

China has been the biggest economic story of the world in the last 30 years with the economy being currently the second largest economy in the world. However, a stock market crash which started last summer has given a challenge to the People’s Bank of China. Analysts have also pinpointed concerns with the market regulators in China who they say have no clear picture of the market. This was after the market regulators issued new guidelines to restrict the numbers of shares significant shareholders in listed companies can sell to one percent in three months.

Soros has also criticized the decisions taken by the European Union that have led the currency into a crisis. Apart from predicting that the Euro is the verge of collapse, he says that the euro collapse would be very damaging both financially and politically with the biggest loss being accrued to Germany. According to Soros, Germans may not have suffered losses so far, but a break-up would lead to loans not being repaid while real losses will be incurred. Refer to http://www.georgesoros.com/essays/george_soros_on_the_euro_crisis/.

With a Billionaire like Soros trusted for his vast financial background, investors are choosing a wait and see approach which is the reason the stocks and investment growth is slowing down. According to Soros, his success in the financial market has given him a greater degree of independence that has made him take a stand on controversial issues.

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