There are many people who like to make predictions on the future of the economy. In this article from Bloomberg, George Soros warns Bloomberg that the financial markets are at the beginning of a crisis. George Soros says that there are many economic indicators that should have people worried. Anyone who wants to look at his track record of predictions will see that he often has a good eye for things before other people do. George Soros has been working in financial markets for many decades, and he brings that depth of experience to the table in making this prediction. Here are several reasons for concern in the current economic environment.
For many years, China was one of the best economic growth stories of our time. However, there are many signs that China is starting to fade in its manufacturing output and other economic indicators. Over the long term, growth in China is essential to overall growth in the economy. There are many people, like George Soros, who point to China as one of the biggest reasons that economic issues are on the horizon. Anyone who wants to look at his track record will see that George Soros often looks at various sources when trying to figure out where weakness is coming from.
There is a difference between job growth and wage growth. Although the job market in the United States is strong, there are many people who have not seen their wages grow in quite some time. This is a huge issue to George Soros, who says that wages have to start increasing before true economic development happens. There are many people who are worried about the fact that job growth is declining in high paying jobs. There are many college graduates who are currently working in a job that does not require a college degree. Anyone who wants to make a change in their career has the opportunity to do so, but current economic conditions mean that this can be difficult. George Soros sees this as a huge weakness that must be fixed over the long term in order to see tangible economic growth.
Low Interest Rates
Another big driver behind the pessimistic nature of George Soros is the fact that interest rates are so low. At some point, these interest rates have to increase. Many people are worried about the fact that interest rates rising will have an adverse effect on the economy. Over the long term, there are many people who will be looking for ways to earn a high return on their invested capital. However, with low interest rates this is not something that is easy to do. George Soros says that he is interested in building up economies around the world in preparation for this rate increase. It will be interesting to see if his prediction plays out or if he is just worried for no reason about the current economic environment that we find ourselves in.