Saturday, January 26, 2013

The Soros Story

This week...George Soros spoke out that Germans are pursuing a very dangerous path.....to austerity.  Because Germany's insistence of being frugal and tracking your money....no one in Europe is getting their  financial help to survive the current monetary crisis....unless they play the austerity game as well.  Soros believes it's a terrible thing....with this all leading eventually leading to a currency war.

I kinda noticed at some point in this interview....that there never were any sharp questions posed back after each comment, and the interview guy simply left everything to stand.

It's a curious thing....most economic experts will admit that recessions come and go.  Generally, unless there are other outside influences....you should do as few things as possible to correct the recession, and it will naturally clear itself up.  Now, I admit....weeks and months will pass while you do very little, and people generally think it's a sign of a weak government to do little.

In Germany's case....they've survived the recessional period of 2008, come out in a bold economic position, have a fairly decent unemployment situation, and the public is more positive than negative.  An American viewing the austerity ideas....might come away with belief in that it works.  

Here's the thing about George Soros....he's made billions betting against countries who got into currency battles, and he bet against them.  Go through the 1970s, 1980s and 1990s.....he knows how to make capital off a screw-up within a government.  Right now?  This austerity deal is not exactly a positive thing with his investment strategy.  My humble guess is that his team would like to create some uncertain paths, and get European countries doing anything but austerity measures.

The bottom line?  I don't see any change for Germany and it's austerity "tour".  If you are a European country in desperate times and need cash from someone....about the only country with cash is Germany, and their rules might be awful harsh, but maybe this pays off in three years with a lean and tough Europe. As for George?  Well....he might want to go back to the center of the game and work up some new angle to the game.

No comments: