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Soros: German austerity could spark currency war
Photo: DPA

Soros: German austerity could spark currency war

Published: 25 Jan 2013 14:41 GMT+01:00
Updated: 25 Jan 2013 14:41 GMT+01:00

US investor George Soros has warned Germany's push for austerity in Europe could spark a dangerous "currency war" with global economic repercussions.

Speaking Thursday evening at the World Economic Forum in Davos, Switzerland, the billionaire renewed his criticism of Berlin's focus on restrictive fiscal and monetary policy to solve Europe's sovereign debt crisis.

"The rest of the world follows a different recipe from the Germans. Germans believe in austerity, and the rest of the world believes in quantitative easing," Soros said in an interview, according to news agency Reuters. "I think the biggest danger is actually, potentially, a currency war."

Hungarian-born Soros is famous for making $1 billion in 1992 by betting against the British pound on global currency markets.

Despite his criticism of Germany's handling of the euro crisis, Soros said the immediate threat to Europe's single currency appeared to be receding.

Soros said Germany would always do "the minimum" to ensure the euro's survival, Bloomberg News reported. And as other countries pursued looser monetary policies than the European Central Bank, Europe's currency was bound to strengthen in the coming months.

“I generally don’t know how far things go but I can see which way they are going,” he said. The trend is for the “euro to rise and the yen to fall.”

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Your comments about this article

15:24 January 25, 2013 by Berlin fuer alles
Well austerity imposed on other Eurozone countries has worked for Germany so far so why not keep going? After all if you keep beating a half dead donkey he will continue to move forward a little with no effort needed from the whipmaster.
15:49 January 25, 2013 by TheCrownPrince
Shut up, Soros. I bet you have lost a lot of money because Germany refused to throw money around like mad. Austerity and thriftiness did not do much good for your little bets, did they, Soros? Old fool. If Soros is barking you can bet your are on the right path.
16:01 January 25, 2013 by Berlin fuer alles
You are of course correct @TheCrownPrince. However in light of failing economies of Germany's Euro partners one could view Soros's words as carrying weight too as it is clear the current remedy of austerity is only making things worse throughout the Eurozone and Germany is now getting pulled down too.
16:31 January 25, 2013 by SchwabHallRocks
Soros is only repeating what essentially all the other governments in the world, sans Germany, are doing: increasing the money supply, increasing government consumption to buffer the effects of the recession.

(Yes, we all know that we are borrowing now and screwing over the next generation.)

However, do I actually detect a whiff of bias against Soros because....???
17:26 January 25, 2013 by smart2012
If Germany would have listened to Soros 2 years ago, now it's economy would not be struggling. And many if my colleagues would not have lost their job..
17:53 January 25, 2013 by Tonne
"The trend is for the ¦quot;euro to rise and the yen to fall.¦quot;"

For Soros that is not a prediction but an intent.
18:16 January 25, 2013 by IchBinKönig
'If Germany would have listened to Soros 2 years ago, now it's economy would not be struggling.'

Exactly as is the case in the United States. The National Debt has not been more than doubles in 4 Years, and the Economy is not Struggling.
21:26 January 25, 2013 by jg.
The Soros recipe for success would be to print money and spend it like water - as Greece, Spain, Italy and others used to do, before they joined the Euro and lost the right to print money. Funnily enough, everyone joined the Euro precisely because they wanted an economy like Germany, a currency like the DM and interest rates to match. Those qualities were all earned though strict fiscal policy on the part of Germany.

Currency speculators like Soros make more money from volatile markets, where they can take advantage of fluctuating exchange rates. Stability is abhorrent to them.

In any case, I cannot see Germans ignoring their own history and attempting growth on the back of a mountain of debt and printed money. The USA has been getting away with this as the Chinese have been willing to prop up the dollar to maintain their exports - but it is a dangerous game (just ask the Argentinians).
22:13 January 25, 2013 by US-TommyBoy
Currency war? I thought y'all just used the Euro?

Ignore the talking head Soros. If Germany is to prosper, it must go it's own way.

None of the rest of the Euro trash has the will, the want, the need and the leadership to look a coming crisis in the eye and prepare for it.

In fact, if Germany does not continue to do exactly what Soros does not want you to do, you will be dragged down with the rest of the Euro Trash.

The question is, what is Soros invested in that whatever the Germans do is causing him heartburn?
13:33 January 26, 2013 by zeddriver
@TheCrownPrince

Soros is no fool nor is he stupid. Evil and manipulating yes. One doesn't become a billionaire by being a misguided fool. As others have stated now and in the past. He makes his money by creating doubt and uncertainty. He has so much money in the market. That he can change the market by saying such things. So. He puts money in a certain area. THEN he starts a conversation to move the market in a direction that will benefit HIM. He's like criminal character Auric Goldfinger in the James Bond film "Goldfinger".
18:20 January 26, 2013 by Enough
Soros is a bastard that does everything he can to manipulate situations to his benifet. I would not believe a thing he says nor would I trust him with anything. The world will be much better off the day he croakes!
21:15 January 26, 2013 by GustavSwe
He have been critical and accusing Germany from the beginning of this financial cris. I don't have any respect of that man because doing so.
00:09 January 27, 2013 by smart2012
Guys, before judging Soros please judge weideman and Verkel. They want to avoid inflation to keep the euro strong, but now they r criticizing Japan cause they print money and euro would become too strong. What the hell to they want those guys, strong, not strong or? Soros is right, Germany is killing Europe and its own business. Glad that q4 2012 GDP of super Germany will be -0,5%
12:04 January 27, 2013 by zeddriver
@smart2012

Of course we can judge Soros. Based on his past actions. He will invest in currency A. Then start bad mouthing currency B. Currency B starts to drop. Then currency A goes up. He sells currency A for big profit. Then turns and buys currency B which he had a hand in deflating. Then starts it all over again by now bad mouthing currency A.

I would have no issues with a savvy investor. I do have an issue with a guy that has enough power/money to influence the market in what ever direction he wants.

Soros has absolutely no sympathy nor cares one wit about the nations or the people within. He cares only about his next billion. And all the while. He invests heavily into the left wing socialist agenda. Which preaches hate to any form of free market capitalism. Which is really odd. Because he got rich from said capitalism that he seems to be against.
17:14 January 27, 2013 by Eastard
On a side note... does anyone else think Soros looks like the Emperor on Star Wars after his change to the demon...?

Soros is good at making money without adding value... That is why he wants Socialism... he knows how to use it... I would say that he is not giving away any tips on economic management unless they would help his money quest... If you look around the world he funds anything that can be used to manipulate (to his interest) the people of different countries... Listen to him... do not use his direction or guidance... he has a history of intervention to his profit...
22:52 January 27, 2013 by zene
From what i know about Soros, he is a smart and respected guy in his field. And those who claim that he manipulates the market by making such statements are being naive. We are a couple of centuries ahead of the time when this was possible. May be if he "publicly" donated a percent or two from his wealth, people would be less envious and have a positive opinion of him.
15:50 January 28, 2013 by smart2012
U did not answer me on Japan case.... Do u then agree with me?
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