The coming (or started?) crisis is not only more actively discussed in media right now. It has become an integral theme of life. Some people scringe and shrink thinking on how they are going to make it through, trying to save some for the hard times. Others rub their hands together thinking on how they will now become richer.
In 2011, Soros put his money on coming crisis, that had to start with China trying to alter its economic model. Previously, in 1999 Soros went short for the Russian market and quickened its collapse and the depth of fall down. He didn’t have much luck after that and lost lots of money playing on other markets. However, this time his words may seem more or less truthful.
In his interview to Bloomberg in Davos, Soros stated that he’s observing China hard landing in relation to its economy. Such a hard landing will lead to deflation, though Soros is sure that China has enough resources to cope with that. However, it is hard to make any forecast even with respect to the crisis of 2008, because the situation is very different as the crisis now starts in Asia and not in the US. It gets even more complicated with the EU probable falling apart due to migrating problems and Greece financial failure.
But China’s GDP growth slowdown will have global consequences. China and oil prices drop down (as well as other resources prices) will create global deflation.
Soros thinks that it’s a bad time to buy assets. Himself, he puts his money on S&P’s 500 falldown (and it has started this year with 8,5%).
The billionaire doesn’t believe that Fed will raise interest rate this year. He accounts that Central Banks will have to lower borrowing costs instead. At least, he is staking on Treasuries growth.