George Soros Is A Genius – And We’re Not

Filed Under (The HELL You Say!) by admin on 20-10-2010

I know this is wordy, but I promise I’ll take you to a point. So bear with me.

SOROS HISTORY (Skip if you like – and go to “STORY STARTS HERE”)

George Soros was born in Budapest, Kingdom of Hungary, the son of the Esperantist writer Tivadar Soros. Tivadar (also known as Teodoro) was a Hungarian Jew, who was a prisoner of war during and after World War I and eventually escaped from Russia to rejoin his family in Budapest.

The family changed its name in 1936 from Schwartz to Soros, in response to growing anti-semitism with the rise of Fascism.

Soros has been married and divorced twice, to Annaliese Witschak, and to Susan Weber Soros. He has five children.

Soros was thirteen years old in March 1944 when Nazi Germany took military control over Hungary. Soros worked for the Jewish Council, which had been established during the Nazi occupation of Hungary to forcibly carry out Nazi and Hungarian government anti-Jewish measures.

Soros emigrated to England in 1947,as an impoverished student lived with his uncle, an orthodox Jew. His uncle paid his living expense while he attended the London School of Economics, where he received a BSc in Philosophy in 1952.

While a student of the philosopher Karl Popper, Soros worked as a railway porter and as a waiter. A university tutor requested aid for Soros, and he received 40 pounds from a Quaker charity. He eventually secured an entry-level position with London merchant bank Singer & Friedlander.

In 1956 Soros moved to New York City, where he worked as an arbitrage trader with F. M. Mayer from 1956 to 1959 and as an analyst with Wertheim & Co. from 1959 to 1963.

From 1963 to 1973 he worked at Arnhold and S. Bleichroder, where he attained the position of vice-president. Soros finally concluded that he was a better investor than he was a philosopher or an executive.

So, in 1967 he persuaded the company to set up an offshore investment fund, First Eagle, for him to run; in 1969 the company founded a second fund for Soros, the Double Eagle hedge fund.

Soros is the founder of Soros Fund Management. In 1970 he co-founded the Quantum Fund with Jim Rogers and Christopher Ink. It returned more than 4000% during the next ten years, and created the bulk of the Soros fortune. Rogers retired from the fund in 1980. Other partners have included Victor Niederhoffer and Stanley Druckenmiller.

In 2007, the Quantum Fund returned almost 32% profit on its investments, netting Soros $2.9 billion.

REAL STORY STARTS HERE

On Black Wednesday (September 16, 1992), Soros’ fund sold short more than $10 billion worth of pounds sterling, profiting from the Bank of England’s reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the Bank of England withdrew the currency from the European Exchange Rate Mechanism, devaluing the pound sterling, and Soros earned an estimated $1.1 billion in the process. He was dubbed “the man who broke the Bank of England.” In 1997, the UK Treasury estimated the cost of Black Wednesday at £3.4 billion.

The Times….. on Monday, October 26, 1992… quoted Soros as saying: “Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell.”

Stanley Druckenmiller, who traded under Soros, originally saw the weakness in the pound. “Soros’ contribution was pushing him to take a gigantic position.”

In 1997, during the Asian financial crisis, then Malaysian Prime Minister Mahathir bin Mohamad accused Soros of using the wealth under his control to punish ASEAN for welcoming Myanmar as a member. Soros has denied Mahathir’s accusations. The nominal US dollar GDP of ASEAN fell by $9.2 billion in 1997 and $218.2 billion (31.7%) in 1998.

How Soros makes money…betting on the collapse of a currency….

The “Forward Exchange”

Speculators (like Soros) can make money in what is known as the “forward market,” where a person can commit themselves to sell a fixed amount of a foreign currency at a specific time in the future, at an exchange rate that is set today.

There are two reasons for engaging in a transaction in the forward market. 1: If a currency trader knows that he will have a certain amount of foreign currency in his possession at a specific time in the future, like from an export deal. Or 2: He may simply guess that a foreign currency will move in a certain direction. In the first case, the trader is “hedging” against the risk of losing money if the currency devalues between now and the future date; while in the second case he is engaging in speculation……..THAT’S what Soros does.

One thing Soros uses to help his speculation “win” is an all-important side effect of forward transactions……..that is, that they usually become self-fulfilling prophecies. Because “forward sales” have been at the core of many recent currency crisises.

In a forward sale, Soros guesses that the value of a currency will fall in the future. So Soros will enter an agreement to sell a fixed amount of this currency at a specified time in the future, at something close to the current rate. If Soros guesses correctly, at the specified future date Soros will be able to BUY the currency CHEAPLY in the market and SELL it at the HIGHER contracted exchange rate.

But when someone as rich and powerful as Soros gets involved in these “forward sales contracts”, those other market participants REALLY take notice. Soros sets the stage for the currency collapse with signals (think scare tactics), saying that he thinks the currency is going to devalue in the future. And he sets up the “STING” and the “suckers” (you and me) with a series of preemptive press releases, interviews, or even books – suggesting that he thinks (insert country’s) currency is in trouble…..freaking out the other investors….in effect hastening the decline. He’s followed that strategy virtually every time in the past.

Since the number of these types of large currency speculators is relatively small, a signal like this from Soros can have a HUGE impact. If Soros decides to offer a forward sale on the U.S. Dollar, other speculators are likely to take notice, and adjust their predictions about the future value of the American currency downwards. If a growing number of speculators think that the United States currency will fall, they will start selling their holdings, subsequently driving down the value of the currency………and thus…………George Soros’ prediction comes true…….the Dollar crashes……..Soros sells……..and makes TONS of money!

I say all THAT to say THIS……………….

George Soros has ALREADY publically stated that he’s pulling out his financial backing of the Democrats, because “I can’t stop the Republican Avalanche.” Some Republicans cheer. But don’t get TOO chipper Skippy! Here’s what I think is coming…..

FIRST::: SOROS PULLS OUT
Soros pulls his money from the Democrats ONLY because he sees them as a dry well………FOR NOW…that “avalanche” thing.

NEXT::: DEMOCRATS WILL SLILTHER OUT OF TOWN silently for the upcoming holidays, “letting” the Bush tax cuts expire…………..a “quiet death”. This will in effect give us the greatest and most devastating tax increase in U.S. history! But, it will allow EVERY Democrat weasel the license to lie, and tell their constituency “OH MAN! THOSE EXPIRED?!” “Oh I was FOR the tax cuts!! I WOULD HAVE voted for them……HONEST!! They just didn’t give me the chance!!”

NEXT::: WHO WANTS TO RAISE THE DEBT CEILING?
April 15 (tax day) is the deadline for congress to complete their budget resolutions. We are at the end of the fiscal year, and we STILL don’t have a budget! The president and this administration knew they were going to be forced to raise the debt ceiling because of all the money they planned on spending. So what did they do? They strategically ignored it

Our current debt limit is $14.29 trillion. When Obama came into office (and remember the big problem was the debt) it was (Bush’s) $11.3 trillion. Now, we had to increase it for the stimulus, you know, he inherited this from Bush, $789 billion.
Then Democrats increased it again, around this time last year, by $290 billion. But the latest one is a little more interesting. Earlier in year, they raised the debt ceiling again by $1.9 trillion!

STAY WITH ME…….this is GREAT! The next time Congress is going to be forced to decide on the debt ceiling, it’s going to be early 2011. That’s great! That means the Republican Congress (who’ll NOW be in control) is going to be forced to vote on that debt ceiling.

THE REPUBLICANS ARE DAMNED IF THEY DO AND DAMNED IF THEY DON’T! They can take a tough stand and say “Hell no, we’re NOT raising that spending ceiling AGAIN!! Terrific! They’ll cut back and stop discretionary spending. OK, if you want to stop all discretionary spending, that’s great. Then let’s just stop subsidizing the unions – cut back on military spending and defense as well – food stamps for people who actually need food stamps etc.

THEN the whole House will collapse. The markets will freak out. They’ll cut back and stop discretionary spending. There will likely be riots and fires in the streets like we’ve seen in Europe…………….ALL accompanied by the economic dagger of the largest tax hike in this country’s history!

Oh, THIS is going to get really ugly!

Well, guess who gets blamed for all the misery when the Republicans say they’re not going to raise the debt ceiling? The GOP, the Tea Party, the obstructionists, those who were just playing power and politics as usual.

EVERYONE get’s blamed EXCEPT the culprits who actually caused it!! So what do the Republicans do? Raise it? And look like a bunch of bold faced liars – after they promised to “cut spending”?! Shyeah right! So here’s what I see………..

2012 Election…………..

The Republicans lose even if they win in 2010…………….Obama gets re-elected because by November 2012 the people hate the Republicans again………….they’ve been led into a well laid ambush…..(that THEY helped create!) the dollar tanks and Soros gets even wealthier………PLUS, he gets his Democrat toadies back in office. GAME OVER.

Soros WINS even when he doesn’t spend his money!! Brilliant.

That’s my prediction. And frankly, if it turns out that my prediction makes me look like a blithering idiot in 2012………….well, you’ll see me smile broadly, and say “I can’t tell you how happy being wrong makes me!!!!”

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