Wednesday, April 10, 2013

Soros: German recession coming in September

“The monetary policy pursued by the eurozone is out of sync with the other major currencies,” Soros said. “The others are engaged in quantitative easing. The Bank of Japan was the last holdout, but it changed sides recently.”

The BOJ said last week it will double the monetary base by the end of 2014 through purchases of government bonds, in Japan’s biggest-ever round of asset buying. (from "Germany to be in recession by September, Soros warns" by Nicholas Comfort, Bloomberg News, In National Post, April 9, 2013, below)
Joining Paul Kruggman in opposing an approach that emphasizes austerity to the exclusion of economic growth, George Soros will inevitably add some considerable heft to the American Nobel Prize Winning Economist's political clout. Signalling an oncoming recession for Germany, and doing it on German soil, is not exactly the stuff of a shrinking violet, and George Soros is no shrinking violet.
A respected, financially secure voice from the left of the political spectrum, Soros has backed Democratic candidates in the United States, with both financial support and even more importantly, "thoughtful counsel" for many years.
While his warning may not please his German hosts, as the clouds of pulling back on government growth gather over the eurozone, nevertheless, his voice will not go unnoticed.
While President Obama continues to call for a balanced approach to the American fiscal woes, including both budget cutting and revenue enhancement and investment in necessary infrastructure and research, there is still an incredibly powerful mass of political opinion in the Congress that seems opposed to anything the Democratic president proposes.
The world needs more voices expressing the kind of temperate and farsighted and even generous and balanced view that Mr. Soros offered to his German audience, and from sources outside government who actually play a significant role in the world economy. Men like Soros and Warren Buffet are not exactly unschooled in either investment or tax matters, and their wise, and balanced views could do with both more distribution and more respect from both the media and the North American political class, especially those on the neo-con right, in both Canada and the U.S.


Germany to be in recession by September, Soros warns

By Nicholas Comfort, Bloomberg News, in National Post, April 9, 2013
Germany’s economy will probably be in a recession by elections scheduled for the end of September because monetary policy officials in the euro area aren’t providing the necessary stimulus, said billionaire investor George Soros.

“Germany itself remains relatively unaffected by the deepening depression that is enveloping the eurozone,” Soros said in a speech at the Johann Wolfgang Goethe-University in Frankfurt Tuesday. “I expect, however, that by the time of the elections, Germany will also be in recession.”
European leaders are seeking to exit their debt crisis by cutting spending while the European Central Bank has stopped short of outright bond-buying programs like those in the U.K. and U.S. Germany’s exports will probably suffer from lower demand in Europe and a weaker yen as the Bank of Japan joins peers in engaging in so-called quantitative easing, Soros said.
“The monetary policy pursued by the eurozone is out of sync with the other major currencies,” Soros said. “The others are engaged in quantitative easing. The Bank of Japan was the last holdout, but it changed sides recently.”

The BOJ said last week it will double the monetary base by the end of 2014 through purchases of government bonds, in Japan’s biggest-ever round of asset buying.
In July, ECB President Mario Draghi declared that central bank was prepared to buy unlimited quantities of government bonds if that meant saving the euro. At the same time, his pledge is tied to conditions so stringent that no country has yet asked him to print money on its behalf and the euro region’s economy is still mired in recession.
Soros also reiterated a call for Germany to back the issuance of joint debt by European countries to lower their borrowing costs or leave the euro area.
Germany “went too far” on pushing Cyprus to impose losses on depositors as part of a rescue for the country as European banks rely on savings as a source of funding and that could undermine the banking industry, he said.






No comments:

Post a Comment