There aren’t too many investment funds that have the pedigree or the history of solid decision-making that George Soros’ team is able to put together when it wades into the financial markets.
Twenty years ago, they saw major structural flaws in Asian economies portending a downturn. They were able to scramble and make the adjustments necessary to avoid any problems weathering the eventual bear market. Since that time, they have continued to be accurate in their assessment of market weaknesses, allowing the Soros fund to continue to grow in any type of economic climate.
What triggered their participation this time?
Of course preparing for a downturn doesn’t necessarily mean that there will be a downturn. The bulls outweigh the bears on a regular basis when the complexities of the market override fundamentals that point to negative changes.
Yet according to answers provided by George Soros in a Wall Street Journal interview, there are some concerns in China regarding their ability to stop money from leaving their economy. Since a lot of people are not aware that China has now passed the United States in most measures as the largest economy in the world, that type of news should cause more people to sit up and notice that China has really been a very delicate balancing act for the past decade.
They have a floating population of migrant workers that move from city to city that is larger than the population of the United States. They also have a centralized-decentralized economy that proves to be the largest job for their leadership on a day-in, day-out basis. If they are experiencing problems with people trying to pull money out, it can be the case that business people see changes that aren’t positive.
George Soros Trading Again
Are there other dynamics at work?
George Soros also mentioned that the dual pressures of Brexit and a floundering Greek economy might put the type of pressure on the EU that it cannot recover from gracefully. Last year Greece was in the unenviable situation where it owed a lot more per capita than it could ever hope to pay back. New leadership came in that pledged to fix things, but the solutions so far seem to be trying to procure more aid.
Brexit is a nationalistic move by Britain to withdraw partially from the EU and go it alone. It may fail.
It is interesting that the Soros group has the community spirit to announce major investment shifts such as their entry into world markets this year. Whether or not their predictions are accurate should be clear by the 1st quarter of next year.
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