George Soros is a famous investor who once in 1992 managed to score $1 billion in profits by betting short $10 billions worth of british pounds, an event that made him known as “The Man Who Broke the Bank of England.” Soros is also the chairman of Soros Fund Management, one of the largest asset management firms in the word and is also one of the richest people in the world. Recently Soros was interviewed by CNBC in Brussels, where he expressed his opinion about the euro zone and the Europe in general as a place for investing.
Amid the eurozone’s inflation slowing down, the region raised many concerns. The European Central Bank has started taking some steps such as introducing negative interest rates in order to stimulate growth, but it has not had a big impact. Soros considers that monetary policy alone won’t help Europe to help the economy, but there is need for fiscal policy as well.
“Finding the fiscal stimuls, at least as far as Ukraine is concerned, would be a positive contribution in reinforcing that (the economy) because leaving it only to monetary policy is one sided. You need fiscal fiscal stimulus as well,” Soros said.
Soros considers that Europe needs a more balanced policy. In the case of Ukraine, the famed investor suggested using project bonds to reorganize some state-owned companies, such as Naftogaz, which would require around $10 billion in such bonds for reorganization.
A couple of days ago, another investor made the headlines regarding his comments on the Euro zone. David Tepper, the president of Appaloosa Management during his speech at the Robin Hood Investors Conference in New York said that he is shortening Euro, betting on the currency decline. He also suggested that the European Central Bank needs to ease the monetary policy in order to stimulate the region. Moreover, Tepper suggested investors buying shor-term euro bonds with a maturity of around 2-3 years. Traders on the foreign exchange market are sure to pay attention to such news coming out of the Eurozone.
And Tepper is not the only one who thinks that the Euro has to decline in order to stimulate the economy on the continent. Earlier in June, the famous Swiss investor, Marc Faber said that easing of the ECB policy might lead to a weaker Euro, which will make Europe more competitive. On the other hand, Dr. Faber considered that if the currency continued to strenthen, then the European economy would continue to suffer. He added that if he were Mario Draghi, he would “squezze the system like a lemon” and would even consider reducing inflation to a deflation level, which would have some positive sides for consumers, who can acquire things like energy and transportation at lower costs.