who is george soros...........?/?
dont tell me to read wikipedia as it is hard to udnerstand. i dont get how he made money off the uk when the pound was devaulued? can u explain in a simple way.
- 8 years agoFavorite Answer
Known as “The Man who Broke the Bank of England,” Soros initiated a British financial crisis by dumping 10 billion sterling, forcing the devaluation of the currency and gaining a billion-dollar profit.
Here is how things played out………….
Prior to 1990 Britain used the fixed exchange rate system where they pegged the value of the pound sterling. This fixed exchange regime meant below market interest rates and resulted in gradually rising inflation.
In 1990 Britain decided to abandon this practice of fixing its currency and adopted policies of the European Exchange Rate Mechanism. (ERM). The European Exchange Rate Mechanism was a build up to a unified currency (i.e the EURO). The Pound Sterling entered the market at 1 Pound: 2.95 Deutshe Mark. This rate was despite that British inflation levels that were three times higher than that of Germany. Forex speculators naturally picked this up, and anticipated an eventual devaluation of the British pound against the Deutshe Mark.
During the fortnight leading to the 16th of September 1992 speculators sold billions of Pounds hoping to buy them back at a depreciated rate hence pocket the difference. Among them was George Soros.
The British decided to intervene by hiking interests rates to 12 %. Government authorized expenditure of Billions of Pounds to buy back the pounds that were being frantically sold. In effect the government was pumping out massive wealth to speculators. The intervention had little or no effect.
During the evening of September 16, 1992 the British government announced its exit from ERM and reverted back to the pegged Pound sterling. Interest rates however remained at 12 %.
This episode shows that the Free Market Forces that drive exchange rates are indeed ‘Free’. The traders of that time continued relentlessly shorting the Pound depite government measures because they knew that at the end of the day market forces would prevail. Once these forces push a currency one way it is almost impossible to intervene via central bank mechanisms, government directives or other.
- ?Lv 43 years ago
George Soros is the Hungarian-born scumbag whose mythical hypocrisy is previous concept. to illustrate, he will communicate a sturdy interest approximately how the powerful maximum be "sturdy company electorate" and how they might desire to act with generosity and compassion. yet what's the fact? Soros tried to break the financial company of britain. He did no longer care if he threw thousands and thousands of Brits into on the spot poverty. The information of this is that he already had thrown thousands and thousands of Indonesians into on the spot povery whilst he vindictively and chilly-heartedly speculated like a pit bull against their distant places money. He wasn't only out to make a some huge money. He became out for blood, and he did no longer care who he harm interior the technique. To this present day, George Soros is declared by employing Indonesians as an "financial terrorist". Geoge Soros is in league with the likes of the Rothchilds and something of the Bilderberg team. they are an rather powerful rigidity. did you comprehend that George Soros supported Obama, even early on in his occupation, and that Henry Kissinger gave Obama his first interest? How plenty clearer does it would be? i even have faith Obama is, actually, the "Manchurian Candidate". Soros is desperate to get a One worldwide government commonly used. He believes that the source of the worldwide's problems is that united statesa. is only too powerful. for this reason, he needs to economically (and for this reason, militarily) cripple the U.S. so as that we are able to no longer handle to pay for to intrude in distant places affairs. Soros might desire to in all probability be the main threatening guy on the earth.