Everyone on Bloomberg knows George Soros. After surviving Nazi occupied Budapest in World War II, he fled Hungary in 1947 for England. With graduation from the London School of Economics, Soros came to the United States, and has made waves in the economic and political worlds.
His latest wave in the economic world concerns what the global economy is doing. The global market, Soros notes, is starting to show signs of another recession – like the one in 2008, or one that’s worse.
The first thing that is causing him to question where the global market is going is China’s yuan. The yuan’s value has taken a large nose dive in the first month or so of 2016. This drop has caused almost $2.5 trillion to be wiped from the equities in Asia. Further more, the issues with adjustments that the yuan faces are causing the Chinese equities market to plummet. Thursday January 7, 2016, Chinese trade markets halted half way through the day and did not resume at all.
Also causing the global economy to sag quite a bit this year is the situation with Ukraine and Russia. According to George Soros, when Greece’s economy began to collapse, Ukraine was tossed aside like chopped liver. This is not good for the world economy. He goes on to argue that, while President Vladimir Putin is not honoring his agreements to cease-fire with Ukraine, he is getting closer to being able to altogether abandon them.
If Ukraine is not treated right, the entire situation could turn into another Greece situation. Greece was given loans to boost its economy a while ago, but the loans came with staggering interest rates. Those rates crushed the economy further instead of helping it. Soros suggests making Ukraine a priority. They’re working to overhaul the old political regime.
However, with Russia beating on their doors, it’s difficult to get anything done. The Minsk II agreement – signed in February of 2015 – has pretty much empowered the allies of Russia who are rebelling against the political overturn. While Ukraine cannot take on Russia’s military in a military confrontation, they are determined to protect the European Union from Russian grievances.
If Soros’ predictions come true, the European Union is in for some hard times.