At 85 years of age billionaire investor, political bon vivant, hedge fund manager, author, and philanthropist, George Soros came out of retirement again to take an active position in investing. Soros had not been an active trader for himself or for the more than $30 billion that his Soros Fund Management LLC since 1992 although representatives that manage his fund claim he has been more of a force than is commonly known.
In 2008 Soros made money for the people that invested in his hedge fund by going against most authorities and analyst’s predictions for the future. George Soros took a position that leveraged political and economic conditions to his advantage. Investments in gold and betting against the value of the British pound made a big score for Soros.
Soros’ most recent position and his renewed involvement in directing trades for his company are again based on Soros’ anticipation of political changes that will impact market conditions. He is basically betting that he can predict the future with a relative certainty that is believable considering his past successes.
Soros bought gold and stock in gold miners. This position means that he anticipates gold to increase in value as currencies decline in value. There are several present indicators that this position is not only safe but will produce a high return at least in the near future.
China is losing momentum as the new economic star of the world. Growth has stalled in part due to better than possible expectation from the Chinese government. The yuan continues to fall versus other currencies. The Chinese government has not only loosened restrictions on stock trading but reduced prices on goods to improve their position.
China’s poor performance has led to lower rates of foreign investment and forced China to sell over 30 percent of the United States paper that it held at a loss. China may be experiencing a mini-depression that government action will not correct in the short term or five years.
Britain’s waffling about exiting the European Union is another reason Soros has gone to metal. The recent murder of one of Britain’s most staunch advocates for exiting the EU has put any decision on hold indefinitely. The value of the pound went down showing that Soros had indeed seen what was coming.
Another of the major concerns that Soros has is the huge number of refugees from wars in the Middle East, Africa, Iraq, and Iran. The continued strife means no business. The welcoming of refugees by some governments may place an excessive tax burden on business and consumers for at least ten years.
The most recent reports on the United States economy show that the U. S. is no where near as strong as the government would like to claim in preparation for the upcoming election. Unemployment and lack of spending are the chief concerns. More troubling to Soros is the potential for a Republican win by Trump. Soros sees Trump as a potentially economic destabilizing factor.
Based on his past record, Soros is most likely going to reap large benefits due to his new direct involvement in the investment strategy of his hedge fund. The U. S. condition may be settled in November but the world conditions that told Soros to buy gold are years away from resolution.
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