George Soros was recently invited to the economic forum in Sri Lanka. He took this opportunity to give a fair warning to investors. He asked investors to be more careful with where they invest their money due to the current market crisis. He goes on to link the current crisis to China’s move to change their growth model. He says that by China trying to shift its growth model, its currency value keeps going down. The effects of this currency devaluation is transferred all over the world. Thus poses a big threat to third world countries as they will see a rapid increase in interest rates. He says This is the same thing that happened in 2008 and brought about a world market crisis.
He anticipates that the global currency, stock, and commodity markets are the ones. The devaluation of the yuan leaves many people with doubts about the strength of China’s economy. The main challenge to this economy is whether it will be able to stand investment and manufacturing toward consumption and services. So far around $2.5 trillion has been lost from the value of global equities. Asia has experienced the biggest loss so far as difficulties in processing Chinese equities halted trade for a day.
Soros is known to be an accurate economic analyst and predictor. In the case the 2008 economic crisis, he had given out a warning before it happened. Before panel in Washington in September 2011, he said that this crisis might be more serious than that of 2008. As this crisis unfolds, China’s Communist Party seems to have a plan. It has the plan to increase the convertibility of the yuan by the year 2020. This plan will also see to it that capital controls are dismantled step by step. China has also made different moves to try and save its economy from crushing. Such measures include the move by People’s Bank of China to lower interest rates. Additional money has also been channeled into the economy to evade inflation.
George Soros is a very successful hedge-fund firm manager and owner. He is among the few managers that has seen to it that their firms have gained averagely 20 percent per year from 1969 to 2011. George Soros now has a net worth of around $27.3 billion from his business and personal properties as listed by Bloomberg Billionaires Index. He started in New York City back in the 1950s, and his luck came by in1992 when made $1 billion through investments. He had by then predicted that the U.K. would have to reduce the value of the pound. He is also a philanthropist who gives out donations through his Open Society Foundation. Through this Foundation, Soros pushes for a free, fair and just society where information can be accessed by anyone.