During his Bretton Woods II weekend conference, billionaire financier George Soros has issued many bold statements, not the least of which included claiming that the Dollar had already fallen as the world’s reserve currency, and is now reduced to sharing the role, in an interview with Bloomberg:
The big question is whether the U.S. dollar should be the reserve currency; it no longer is, it shares that role with the euro, other currencies, and commodities. But it’s not just gold being used as a substitute, but oil too, which is putting upward pressure on the market.
Soros has convened the Bretton Woods II event in hopes of leading financial reforms and formulating a replacement to the dollar on the world market. He has argued that the original Bretton Woods agreements, which also created the World Bank and International Monetary Fund (IMF), have been outmoded and are in need of new arrangements.
Meanwhile, Soros prescribed more debt for the U.S., urging against calls to shrink the budget. “There is very a strong push to tighten the budget as a way to reduce government spending… In my opinion, the country could actually absorb some more debt in order to get the economy going,” he said.
“If you have a growing economy, you can tolerate a higher level of debt.”
Perhaps Soros’ comments reached Washington in time, as their budget cuts only amounted to a paltry $38 billion, a literal drop in the bucket to mounting national debt.
In other matters, Soros estimated that despite the risks of inflation in China, it had emerged as the the ‘big winner’ of the financial crisis. It had been largely immune to the collapse due to its ‘isolation,’ he indicated. Indeed, ‘China was the main beneficiary of globalization,’ Soros said.
Soros also commented on other matters, like the ECB interest rate hike. Further statements are expected to emerge from him and other figures attending the Bretton Woods II conference after it concludes.
Article written by Aaron Dykes
April 9, 2011