The founder and chair of Soros Fund Management, George Soros is worried about China’s economy and how it is going to impact the global economy. Soros has, therefore, dialed back on the U.S. stocks investment by more than a third and betting for gold. The recent change in strategy is reflected in the value of Soros Fund Management’s publicly disclosed holdings that declined by 37 percent to $3.5 billion by the end of March according to reports from the government filing. It is clear that Soros Fund Management has opted for bearish options that include 2.1 million shares of SPDR 500 ETF Trust at a value of $431 million.
The firm has bought 1.05 million shares from SPDR Gold Trust and recently took a stake in Barrick Gold Corp, the world’s biggest producer of gold with shares worth $264 million. Soros Fund Management has $24 billion in assets under management, all belonging to George Soros and his family after refunding the assets the firm owed to other investors.
George Soros had expressed doubts in the China’s economy warning investors to take caution as the debt-fueled economy resembles the moments before U.S. 2007/2008 financial crisis that became the global financial crisis. Soros has publicly said that a “hard landing” for China is “practically unavoidable” and added that it would worsen the already ailing global economy, drag down the value of stocks, cause deflation and boost the U.S. economy.
The Brexit polls have also put a darker future of the world economy as the British people voted out of the European Union. Since the election, the price of gold has sky-rocketed, and the value of the Great Britain Pound has plunged significantly. Soros predicted that Britain’s exit from the European Union would be messy, and it would also cast problems to the global economy. While Soros has gained from the rising gold prices, other investors are following his way and as he recently expressed doubts about the future of the European Union to stay united.
Some analysts say that the surge in the price of gold is just a safe-haven-demand, calling it temporary. However, some analysts believe that the panicking investors are just overreacting to the Brexit situation which is going to take some time to be implemented and take effect. There is no doubt the confidence in the world economy is falling which is the reason Soros chose the bearish option. Soros has described other problems affecting the global economy such as immigration, the Syrian crisis, the threat of terrorism from ISIS and other groups, the Russian-Ukrainian crisis, and the geopolitical issues would affect the value of the U.S. dollar and derail the world economy.
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