The stock market has been taking a beating in 2016. The first three weeks of January have not been good to investors, and if George Soros is right, 2016 will be a very difficult year for investors. George Soros the multi-billionaire and hedge fund manager recently told Bloomberg.com that China has some major adjustment issue to face, and Soros believes those issues are in crisis mode.
Soros said the Chinese issues are so disturbing that a replay of the 2008 crisis might develop in the global economic market. Mr. Soros went on to say that stock markets around the world are feeling the impact of these Chinese issues, and the Chinese government is making matters worse by the way they are trying to correct them.
What Mr. George Soros means is the central bank of China is playing with their currency, the yuan. The bank is lowering the value of the yuan against the dollar, and that is having an impact on the currency exchange as well as worldwide stock markets. China is trying to boost their export business by making their products cheaper. That may help increase the Chinese gross domestic product growth rate a little, but it is creating uncertainty as well as concerns for economists and the financial industry.
George Soros believes the Chinese financial debacle is just one debacle that will fuel a financial meltdown in 2016. He thinks the Ukraine-Russian situation is another factor in the meltdown. Soros shared those thoughts in a NYBooks.com interview recently. According to Soros, the Ukraine is a new Ukraine that wants to be part of the European Union. Soros has a foundation in the Ukraine so he knows first-hand what the situation is in that part of the world. Soros has more than 20 foundations around the world. He is a humanitarian as well as an economic genius.
The European Union’s bickering about the migration crisis and Britain’s referendum to leave the European Union are two other factors that are contributing to the uneasiness in the world. Investors don’t know if there will be an EU six months from now, and they don’t know if Europe is going to be able to absorb all the migrants from the Middle East crisis. All of those issues are solvable, but Soros thinks they won’t be solved at the same time, especially the China situation.
Mr. Soros is advising investors to put their money in other securities until some of these issues play out, and investors around the world are listening to him. The gold and silver markets have come alive again and so has the bond market. Some investors say they will stay away from stocks until they hit rock bottom. That’s how experts like Soros work the stock market.