Interesting comments from George Soros at a speech in Oslo today. Mr. Soros is bucking the trend that is driving markets higher today – that being the idea that China will avoid a hard landing. A few quotes from the Bloomberg piece on the Soros speech:
China has missed its opportunity to stem inflation and may now risk a hard landing, billionaire investor George Soros said.
The world’s second-largest economy is in a “bit of a bubble,” Soros, 80, said today at a conference in Oslo. There are some signs that China is “losing control,” he said.
China today ordered lenders to set aside more cash as reserves after inflation last month accelerated at the fastest pace in almost three years. Consumer prices rose an annual 5.5 percent in May, even after the central bank raised interest rates four times since September. Inflation has exceeded the government’s 4 percent target every month this year.
China’s formula for steering its economy is “running out of steam,” Soros said, adding the country is seeing the beginnings of wage-price inflation.
Soros says the hard landing in China will exacerbate woes in the USA and Europe where the banking system’s remain undercapitalized and unhealthy. Soros says government officials are behind the curve on responding to the crisis.
The full Bloomberg piece is here.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.