(04-03-2023, 07:08 AM)Lucky2Last Wrote:

(04-02-2023, 02:49 PM)The Real Marty Wrote: I've been reading up on Soros and his bet against the British pound, and I can't see where what he did was wrong.  He correctly perceived that the British pound was mis-priced against other currencies, he shorted the pound, and made a billion dollars.  I can't see anything he did in that case that was illegal or immoral.  Most articles I've read seem to think what he did was actually beneficial to the British economy. 

I don't agree with his political views at all, I will say that.

Let's see if I can explain this. One of the requirements of the European Exchange Rate Mechanism was that a country needed to keep their currency at a set value. Right? So, if a currency went under a certain value, the government had to do something about it. When GB got close to that mark, Soros and his cronies took up a MASSIVE short position against it, which led to rapid depreciation. Because England had to follow the rules, they used their foreign currency reserve to start buying pounds in markets where there was a sell-off (brought on by the huge short and rapid depreciation), and they raised their interest rates to 10% (affecting the British people). England had to remove itself from the European exchange or face a full collapse. 

This was an intentional crashing of the pound by billionaires so that they could get rich. It sent a whole country into a recession. From what I understand, Germany could have helped England by buying their currency, but chose not to (which is how China saved Hong Kong). However, the fault is with these billionaires who intentionally pushed it over the edge. Several people/firms had a short position against the pound in the off chance it failed, but none of them were big enough [BLEEP] to try to manipulate the market in such a way that would intentionally undermine the efforts of the government to resolve the issue. That was Soros and his buddy. And they did it for greed. 

What's ok about that, Marty? That it's not illegal? He manipulated markets and sent 15 different nations into massive recessions. How many people did that guy hurt for profit? Now he's "The Philanthropist?" Just because he buys the media and donated most of his money to non-profit charities, that just happen to be largely political? He's telling you what his policies are, and he's trying to make a global government, one in which he has massive amounts of influence. Who in their right mind would trust this guy? You think he wouldn't do the same thing to us?

I don't quite see it that way.  The way I see it, Soros saw that the way Britain tied the Pound to the German Mark was fundamentally unsound, and that the Pound needed to be devalued in relation to the Mark.  So he bet against the Pound.  And he was right.  The Pound was eventually devalued.  

I don't think shorting something can permanently depress the price of it.  The price of any financial instrument, whether it is stocks or currency or anything else, is in the long term based on actual fundamental value.  You establish a short position, but eventually you have to close out your position by buying back the thing you shorted.  If no one is willing to admit that you're right, and admit that that thing is worth less than it was when you sold it short, then you lose your money.  In Soros' case, the Pound was actually, truly, worth a lot less than the price when he sold it short.  When everyone finally admitted that, Soros closed his position at a profit.  

For a short position to push an asset value off a cliff, that asset value has to be teetering on the edge of a cliff in the first place.  

The problem with the pound wasn't with Soros.  The problem was with the Bank of England, which was artificially propping up the value of the pound by pegging it to the Mark in spite of low interest rates and high inflation.  And like I said before, many economists think Soros actually did the the British a favor in the long run, because the longer they waited to devalue the pound, the worse it would have been.   

Where the British went wrong was trying to fight to keep the pound artificially linked to the Mark.  That cost the British taxpayers billions of pounds.  But that's not Soros' fault.  The British needed to devalue the pound.  Because it was artificially kept way overvalued by its tie to the Mark.  

[/url][url=https://theeconreview.com/2018/10/16/how-soros-broke-the-british-pound/]How Soros Broke the British Pound | The Economics Review (theeconreview.com)

You don't need to respond to this.  This is just my opinion.

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