Billionaire investor George Soros is betting against Asian currencies in a big way and China is pissed, calling his actions nothing short of a declaration of war against its economy.
People’s Daily, the state-run paper of China’s Communist Party, unleashed its wrath on Soros with an op-ed titled, “Declaring war on China’s currency? Ha ha.”
“Soros openly declared war on China, asserting that he shorted a large volume of Asian currencies,” reads the article which was published Tuesday. “There is no way his challenge to the Chinese renminbi and the Hong Kong dollar will succeed.”
The Chinese economy is off to a disastrous 2016 and its currency, the renminbi, has dropped 5 percent in value against the dollar, reports CNN Money. China is hemorrhaging money at an alarming rate with an estimated $700 billion in capital outflows last year.
Soros has been extremely critical of the Chinese economy and blamed China for 2016’s global market turmoil. Speaking with Bloomberg TV in France, Soros revealed he is shorting Asian currencies (although he would not be specific), the S&P 500 and major commodity-producing countries.
“China has a major adjustment problem. I would say it amounts to a crisis,” said Soros in a recent speech in Sri Lanka, according to CNN Money. “When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.”
The op-ed fires back and Soros, saying shorting the renminbi is declaring “‘war’ on China.”
China has reason to worry given Soros’s track record of predictions. He came to global fame and infamy as the man who “broke” the Bank of England by shorting its currency when it imploded in 1992. Soros has also been implicated in triggering the Asian financial crisis of 1997 with speculative investments, reports CNN Money.
Soros co-founded his investment firm in 1973, originally called the Quantum Fund, with Jim Rogers, another noted wealthy investor. Rogers has been very vocal about the markets in recent months and echoes the views of Soros, admitting in a recent interview he’s shorting the S&P 500 and the Dow Jones Industrial Average, reports the Midas Letter. Rogers, like Soros, sees volatile times ahead for the global financial system.
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