LILA RAJIVA: The Mind-Body Politic
Individuals Not Ideologies
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Soros: Gold In Bubble; But Keep Stimulus Going…..
Always nice to see people talk out of both sides of their mouth.
Here is currency speculator George Soros (ex of legendary hedge-fund Quantum) at the World Economic Forum at Davos:
“When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.”
So far so good. Mis-price money (cheap interest rates) and people don’t want to keep their savings in it. They want it in something that isn’t subject to mis-pricing (so they hope) - hence gold.
But then Soros shows how disingenuous he’s being by adding this:
“I think that since the adjustment process to the recession is incomplete, there is a need for additional stimulus. Some countries, like the US and European countries, have plenty of room to increase their deficits. The political resistance to doing so increases the chances of a double dip in the economy in 2011 and after that.”
That is, he’s suggesting running more deficits and keeping the money spigot going, just the thing that’s caused the gold price to rise.
So how do we understand this?
Gold is due for a technical correction, but it’s also probably responding to deflation in the general economy. It’s not going down that fast, because a lot of people are also buying it speculatively.
That’s the tug of war.
Meanwhile, who know what Soros’ holdings are and who knows what his motivations are in making such contradictory statements.
But anyone who takes these sorts of pronouncements as any kind of lead for their own investments/speculations, should be prepared to part fairly soon from their money.
Lanka Needs Soros Like A Hole In The Head
“In 1992, Soros earned the epithet “the man who broke the Bank of England” by demanding the Bank to raise its interest rates or to float the currency (so that he could make more money). The Bank did neither. He retaliated by selling “short” more than $10 billion worth of pound sterling, forcing the Bank of England to depreciate the pound: Soros amassed an estimated US$ 1.1 billion in the process.
The Conscience Of A Speculator
December 20, 1998: an exchange between George Soros and Steve Kroft on “60 Minutes”:
“Kroft: “You’re a Hungarian Jew …”
Soros: “Mm-hmm.”……Kroft: “My understanding is that you went … went out, in fact, and helped in the confiscation of property from the Jews.”
Soros: “Yes, that’s right. Yes.”
Kroft: “I mean, that’s—that sounds like an experience that would send lots of people to the psychiatric couch for many, many years. Was it difficult?”
Soros: “Not, not at all. Not at all. Maybe as a child you don’t … you don’t see the connection. But it was—it created no—no problem at all.”
Kroft: “No feeling of guilt?”
Soros: “No.”
Kroft: “For example, that, ‘I’m Jewish, and here I am, watching these people go. I could just as easily be these, I should be there.’ None of that?”
Soros: “Well, of course, … I could be on the other side or I could be the one from whom the thing is being taken away. But there was no sense that I shouldn’t be there, because that was—well, actually, in a funny way, it’s just like in the markets—that is I weren’t there—of course, I wasn’t doing it, but somebody else would—would—would be taking it away anyhow. And it was the—whether I was there or not, I was only a spectator, the property was being taken away. So the—I had no role in taking away that property. So I had no sense of guilt.”
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