George Soros is one of the smartest investors in the world. Here's a taste:
You know George Soros. He’s the investor’s investor—the man who still holds the record for making more money in a single day’s trading than anyone. He pocketed $1 billion betting against the British pound on “Black Wednesday” in 1992, when sterling lost 20 percent of its value in less than 24 hours and crashed out of the European exchange-rate mechanism. No wonder Brits call him, with a mix of awe and annoyance, “the man who broke the Bank of England.”The article goes on to note that Soros "doesn’t make small bets on anything." There's quite a lot here, and it's a really good read.
But I want to focus on this (my paragraphing):
Sitting in his 33rd-floor corner office high above Seventh Avenue in New York, preparing for his trip to Davos, he is more concerned with surviving than staying rich. “At times like these, survival is the most important thing,” he says, peering through his owlish glasses and brushing wisps of gray hair off his forehead.That's as stark a statement as I've read from anyone with near his credibility. Go back (you who have strong stomachs) and read that again. No sentence was spoken at random.
He doesn’t just mean it’s time to protect your assets. He means it’s time to stave off disaster. As he sees it, the world faces one of the most dangerous periods of modern history—a period of “evil.”
Europe is confronting a descent into chaos and conflict. In America he predicts riots on the streets that will lead to a brutal clampdown that will dramatically curtail civil liberties. The global economic system could even collapse altogether.
“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros tells Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”Note the quotes; Soros is speaking in his own voice, unparaphrased by the writer.
Three short notes, then I'll leave you to your thoughts:
■ We've been warning on these pages about the risk of deflation for a while. It's likely that no one reading this has experienced such a world. To get a sense of life in a deflationary world, try this.
■ About the euro, is this why it bounced off of $1.26 and sits at $1.31 at the moment? (Euro chart here.)
■ About civil liberties and the mental "state of the nation," I offer this thought experiment.
Imagine that there were a second big terrorist attack sometime during Bush II's reign, in 2005 or 2006 for example. The response would have been to shut down the country even further. The experiment — how much further? If the "authorities" wanted to institute exit visas, for example, would the country have objected?
The point is this — the degree of loss of liberty we could experience is not a function of what the American people will tolerate. The American people tolerated Bush v Gore. It's a function of how much loss of liberty the "authorities" (Our Betters) are interested in imposing.
So what is that extent? What's the lower limit to the shutdown, in a world gone into the streets — Occupyers, homeless; browns and blacks; criminals, druggies, the terminally unemployed — in other words, all the Unpeople we have within us?
Again, I'll leave you to your thoughts. Me, could be having a wide-awake night chez moi. (Yet another of George Soros' sins. Thank you, sir.)