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 Markets could be derailed again, warns Soros

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Join date : 2009-10-19

PostSubject: Markets could be derailed again, warns Soros   Thu 15 Apr 2010, 8:46 pm

The comments are the best part of the piece, definitely check them out, I immediately took a liking to this one on the first page...

"Soros is incorrect that markets are inherently unstable. It is the governments and the central banks that make them unstable. Their random manipulation of regulations and the constant but random increase in the supply of credit crates havoc in the market place. If governments ran a balanced budgets, stop creating incentives to speculate in real estate and other markets, and central banks quit expanding their balance sheets, excesses would not be crated. http://www.TheAngryGrapes.com"

Quote :

Railway porter-turned-billionaire financier George Soros delivered a
stark warning last night that the financial world is on the wrong track
and that we may be hurtling towards an even bigger boom and bust than in
the credit crisis.

The man who ‘broke’ the Bank of England (and who is still able to
earn a cool $3.3 bln in a year) said the same strategy of borrowing and
spending that had got us out of the Asian crisis could shunt us towards
another crisis unless tough lessons are learned.

Soros, who worked as a porter to pay for his studies at the London
School of Economics after emigrating from Hungary, warned us to heed the
lesson that modern economics had got it wrong and that markets are not
inherently stable.

“The success in bailing out the system on the previous occasion led
to a superbubble, except that in 2008 we used the same methods,” he told
a meeting hosted by The Economist at the City of London’s modern and impressive Haberdashers’ Hall.

“Unless we learn the lessons, that markets are inherently unstable
and that stability needs to the objective of public policy, we are
facing a yet larger bubble.

“We have added to the leverage by replacing private credit with
sovereign credit and increasing national debt by a significant amount.”

One crumb of comfort could be the 10-year period between the 1998
Asian crisis and the 2008 credit crisis. If the pattern is repeated, it
should at least mean we have another 8 years to go before the next

They're setting us up for round-two, "Crash, the Sequel"

"For every thousand hacking at the leaves of evil, there is one striking at the root."
David Thoreau (1817-1862)
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