There are few people as respected as George Soros when it comes to predicting economic events. Over the past couple of years, he has shown the ability to make solid predictions that other people cannot. In a recent article by Bloomberg, George Soros says that many of the global markets are entering a stage where it could be dangerous for investors, much like in 2008. The good news is that there are many things that are different about this year than in 2008. However, global economic weakness is something that no one wants to deal with. Here are several things to take away from the most recent prediction of George Soros.
One of the biggest news stories over the past couple of years is the fact that there is a lot of weakness coming out of China. Anyone who has followed global economic events over the past decade knows just how important China is to the global stage. George Soros says that any weakness coming out of China can have a lot of bad effects on people around the world. If there is a major slowdown there, people should expect for the global markets to be in trouble. Over the next couple of months, watching what happens in the Chinese stock market will be essential to formulating a long term strategy.
Another major news story this year is the price of oil. There is more production around the world than many people thought possible. This has sent the price of oil down over the past year. The price of oil is one of the major indicators of how the overall economy is doing. The issue is that there is generally a lot of economic growth when oil prices go down. However, George Soros points out that there really has not been a bump in activity after the price has fallen. This does not bode well for when the price of oil goes back up to levels that are normal historically. Over the long term, anyone who is wanting to look at the total economic picture must look at the price of oil. This is one of the biggest reasons that George Soros is bearish on the overall economy.
George Soros is also worried about the fact that interest rates have been at record lows over the past couple of months. Anyone who wants to make an impact in their economic situation needs to understand how interest rates work. Right now, interest rates are at historic lows in order to get the economy going again. There are many people who say that once interest rates rise, there are going to be many people who suffer as a result. George Soros says that the world is going to have trouble adapting to a new interest rate environment.