George Soros has a long history of speaking up for the underdog on the international scene. This time, Soros is brining attention to the plight of Ukraine and the need for international financial support to ensure that this newly reformed sovereign state is able to survive in the long run. Specifically, Soros Ukraine is calling on the European Union to step up its game in making sure that Ukraine has enough of a financial buffer to be able to continue on the path to putting down democratic roots. Soros has laid out a strategy that benefits both Ukraine and the EU in that it strengthens the solidarity of the entire region. It is clear from Soros’ latest round of outreach to European leaders that he strongly believes in the potential of the new Ukraine to hold its ground against Russia and extend the goals of the EU throughout the continent.
In appealing to leaders of the EU to contribute greater financial assistance to Ukraine, Soros explains that Ukraine has almost completely transformed itself from a corrupt, isolated country into a democratic and transparent society. Although there are many reforms that have yet to be implemented, George Soros Ukraine is incredibly enthusiastic about the progress Ukraine has made so far in ridding the country of corruption and instilling a standard of transparency in government. Through Soros’ work as the Chairman of the Open Society Foundations, the goal of openness in government is paramount for him. With the assistance of European leaders, Soros thinks that Ukraine can continue on its path of restructuring its old bureaucratic system of government.
Europe’s Ukrainian Lifeline
George Soros – Project Syndicat
According to Soros, the situation in Ukraine is far from stable at the moment. All of its successes in holding off Russian intervention could be completely wiped out if Ukraine is not able to stabilize its economic situation. The country has borrowed heavily from foreign sources in order to stave off Russian military invasion. Soros says that European creditors of Ukraine should be understanding of this situation and realize that there is much more to be gained from a stable Ukraine than a country on the brink of economic collapse. Essentially, Soros hopes that European leaders can see past the immediate need to collect on their debts from Ukraine and lend further financial support so that Ukraine can get itself on proper footing.
For Soros, there is no question that a prosperous Ukraine is in the best interest of the EU. If Ukraine is able to pull through this period of transformation, it will be clear to the world that Russia is an unwelcome force in Ukraine’s political affairs. Furthermore, a stable Ukraine will show the world that economic stability is possible in that region. This would quiet Putin’s accusations of Western hostility toward Russia because a healthy Ukraine means that Putin is the only roadblock in the way of economic prosperity in Russia. Soros thinks that EU assistance to Ukraine could expand the reach of the EU and quickly shut down any attempts of forceful intervention by Russia.
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Since the great depression and the Second World War the world has never faced another large scale economic challenge until now. 2007-2008 were two dark years on nybooks.com that the world economies deteriorated and faced uncertainty. The two years saw the collapse of various institution and others declared bankruptcy in order to protect themselves. Some years have passed by and we could be facing another economic meltdown. George Soros who is a renowned economist has predicted that we are not out of the woods yet. Some symptoms which were exhibited during the 2007-2008 financial crunches have begun exhibiting themselves.
However unless other financial recessions that happen due to a series of errors the immediate one will be caused by miscalculations done by some economies. For instance China devalued its currency in order to adopt a new economic system. China has a debt deficit of 2.34 trillion Yuan which is approximately ($ 362 billion). According to George Soros their current economic woes resemble the US economy during the 2007-2008 financial crisis. The trouble of fueling such an economy is that banks are operating on cash deficit which is needed to counter bad debts. George Soros further stated that Chinese banks are being negatively affected by the credit crisis since they have more debts than they have assets. The end result is that banks will continue borrowing from each other delaying the inevitable. Some may say that the Chinese economy is not doing badly with a 62% increase in real estate in Shenzen. The borrowing is a continuous circle on biography.com that can play out in different ways but the end result will be the same, the US economy was in such a position in 2005 and 2006. We all know what happened in the end.
George Soros is not the only worried person Andrew Colquhoun who is the head of Asia Pacific Sovereigns at Fitch ratings is also concerned. While offering an interview in New York George Soros is of the view that China’s debt and increased borrowing from banks would eventually eat up the economy. It is evident that the Chinese government is using state infrastructure to sustain the feeble economy while at the same time asserting that the economy is stable. He observed that some companies on nytimes.com are pulling out of the economy. He gave an example of China’s Anbag Insurance Group CO. which withdrew its $14 billion takeover offer for Starwood Hotels & Resorts Worldwide INC.
George Soros who is a hedge fund billionaire has correctly predicted various economic scenarios which have played out his way. Since 1992 he has managed a hugely successful business empire posting more than 20% gains since then.
The Global Markets are currently facing acrisis, and there is in need for investors to be very cautious. George Soros revealed during an economic forum in Sri Lanka. George also said that China was struggling to get a new growth model, and its currency devolution was carrying problems to the rest of the globe. It a great challenge to the developing world to return to positive interest rates and that the current environments possess similarities to 2008.
The Stock, Global currency and the commodity markets are all under fire in the first week of the New Year. The sinking yuan adds to the concern about the strength of the Chinese economy as it moves away from the manufacturing and investment towards services and consumption. A total of $2.5 million was removed from the global equities during the year; losses increased in Asia on Thursday as a plunge in the Chinese equities stopped trade for the rest of the day.
George Soros said on Bloomberg Business, “China is known to have an important adjustment problem. It usually amounts to a crisis. There was a serious challenge whenever I looked at the financial markets. It reminded me of the crisis we had in 2008.”
George Soros also warned of a similar 2008 catastrophe. Speaking on a panel in September 2011, George said that the Greece-born European debt crunch was much more severe compared to the 2008 crisis.
George Soros owns a hedge fund company which gained approximately 20% every year on average from 1969 to 2011. It has a net worth of around $27.3 billion. This is according to the Bloomberg Billionaires Index. George started his career in New York City in 1950’s and received lots of positive comments in regard to his investing prowess in 1992 by gaining $1 billion with a bet that the United Kingdom will be pushed to devalue the pound.
Volatility measures are surging this year. The Chicago Board Options Exchange Volatility Index, which is also referred to as the VIX or the fear gauge, is up to 13 %. Nikkei Stock Average Volatility Index, which is also responsible for measuring the protection cost on the Japanese shares, also increased by 43% in 2016.
George Soros is the founder and also chairs the Soros Fund Management and the Open Society Foundations. George was born in Budapest in 1930. He survived the Nazi occupation during the World War II and ran away from the communist-dominated Hungary in 1947 heading to England.Soros graduated from the London School of Economics. He later moved to the US where he accumulated alarge fortune through the international investment fund.
George had been an active philanthropist since 1979 when he started raising funds to help the black students who attended Cape Town University during the apartheid period in South Africa.
Visit Open Society Foundations website to know more about George Soros.