Tuesday, June 30, 2009

Soros, One Step Behind

Billionaire investor George Soros today predicted a "stop-go" economy for the United States, saying fears of inflation will drive up interest rates and choke off growth.

"As markets revive, fear of inflation will drive up interest rates, which will choke off recovery," he said at a breakfast hosted by WSJ.

This says two things about Soros. He is just pretty much a trend watcher and he doesn't watch money supply.

Although a lot of indicators continue to signal an upturn in the economy, this is the result of earlier Fed money printing. For the last three months the aggressive money printing has stopped, so rather than stop and go, right now, we are headed for a stall, and, if Bernanke persists with slow money printing, a second crash. The price inflation fears will subside (except at the consumer level.)

1 comment:

  1. I also don't think he's the insider some think he is. He was surprised at the SDRs being adopted so quickly at the G20 meeting. Then, he wrote in an FT op-ed that he wanted to abolish CDS. Maybe he's just talking his book, but that seems completely unrealistic given it would put JPM out of business overnight. Were he an insider, he would develop consensus for things that have a chance, rather than rattle off a wish list.