GEORGE SOROS LAYS DOWN CHALLENGE TO BROWN BY BUYING GOLD.
Word has it that George Soros, the Hungarian genius, is buying gold. OK,
Everyone knows that when such news gets around it is usually because he is
poised to sell
to those who think they can make money by riding on his back. In the case of
gold, which has performed abysmally for a long time apart from the brief spike
the central banks made their announcement last September, such a ploy is
Only last week Soros announced that he was withdrawing from aggressive hedge
fund management because markets are now "too volatile." This could reasonably be
translated as saying that the equity, bond and currency markets in which he has
made so much money are now too transparent. In other words it has become ever
easier for his operations to be tracked and this means, in turn, that he can no
longer remain one jump ahead.
The man is no longer a hungry fighter and as his book, The Crisis of Global
Capitalism" shows he is happy to give more of his time to philosophising. He has
that the ideals of tolerant democracies can be threatened by those with an
absolutist faith in the free market to the extent that market mechanism is
allowed to assume
a position of overriding importance.
Once a man gets wrapped up in philosophy his thoughts turn to the longer term.
The dollar, as Soros knows better than most, is in a high risk area. The US
has been pumped up on the strength of a private sector credit bubble, and the
dollar depends on huge capital inflows. There is also a head of political
building up to persuade the Federal Reserve to raise interest rates, slow down
the US economy and take the pressure off the euro.
To the new long termist Soros this must provide an ideal opportunity. He can
pick up gold easily enough from politicians and central bankers who have never
trading profit in their lives. Such buying would be difficult to detect, so he
would be under no pressure. And when the moment eventually comes, as come it
when the dollar falls he will pull off the coup of a lifetime.
Gold went up US$4 last week despite the news that the Swiss were going to put
120 tonnes on the market by September. Brown will continue with his gold sales.
All Soros has to do is sign cheques and sell off loose holdings in his Quantum
portfolio. Gives him plenty of time for philosophy in the long summer months.
8 May 2000
-- Forrest Bishop Manager, Interworld Productions, LLC Chairman, Institute of Atomic-Scale Engineering http://www.speakeasy.org/~forrestb
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