The Long Crisis

Think what you will about George Soros and his politics but as an investor and money maker old George earns high marks. One of the most successful hedge funds of all time, the Quantum Fund, was founded by George Soros and Jim Rogers in the early 1970’s. Rogers cashed out in the early 1980’s as a billionaire. Soros is still going strong, earning by some accounts more than two billion dollars in 2008 even as the world’s financial system neared collapse.

Soros often takes a long term contrarian view with his investments. He bets on finding a widely held premise that in his view is wrong then takes the other side of the trade. In 1992 Soros become known as the “man who broke the Bank of England” as he bet in a big way that the British Pound was overvalued. When soon after the value of the Pound sharply declined George Soros made a fortune in the billions. That was in the days when a billion dollars still meant something.

Now Soros is predicting hard times for the US economy as the long crisis continues despite bailout after bailout. Even more hard times are coming to main street America BECAUSE of the bailouts and misallocation of capital and further trillion dollar increases in debt levels by the Federal Government.

“The biggest problem going forward is the U.S.,” billionaire investor, George Soros, recently remarked, “as that’s where consumers are over-indebted and the banking system is basically bankrupt. The U.S. will be very slow in recovery and can’t really get going. The United States has a long way to go.”

As long as the efforts of the US government is to reinflate old bubbles and to blow new ones by creating even more debt Soros will be once again proved correct in his assessment. The good old boys and gals in corrupt Washington just don’t get it. Moving towards an old Soviet style top down economy burdened by massive debt and micro management won’t get the job done. The US economy is in for a world full of hurt and the efforts of those in power are only adding to the degree of injury.

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