"Everything Has Gone Wrong": Soros Warns "Major" Financial Crisis Is Coming

In a speech delivered Tuesday in Paris, billionaire investor George Soros warned that the world could be on the brink of another devastating financial crisis, as debt crises reemerge in Europe and a strengthening dollar pressures both the US's emerging- and developed-market rivals.

And Europe, with Italy dragging worries about the possible dissolution of the euro back to the forefront, won't be far behind. Political pressures like the dissolution of its transatlantic alliance with the US will eventually translate into economic harm. Presently, Europe is facing three pressing problems: The refugee crisis, the austerity policy that has hindered Europe's economic development, and territorial disintegration - not only Brexit, but the threat that countries like Italy might follow suit...

 “Brexit is an immensely damaging process harmful to both sides,” the billionaire exclaimed.

Soros

But in the near-term, the US's decision to pull out of the Iran deal is straining Europe's alliance with its most important Western partner just as the strengthening dollar is constricting financial conditions around the world.

Until recently, it could have been argued that austerity is working: the European economy is slowly improving, and Europe must simply persevere. But, looking ahead, Europe now faces the collapse of the Iran nuclear deal and the destruction of the transatlantic alliance, which is bound to have a negative effect on its economy and cause other dislocations.

The strength of the dollar is already precipitating a flight from emerging-market currencies. We may be heading for another major financial crisis. The economic stimulus of a Marshall Plan for Africa and other parts of the developing world should kick in just at the right time. That is what has led me to put forward an out-of-the-box proposal for financing it.

Soros's warning comes as Italian 2Y bond yields shoot higher by the most on record:

Italian

Adding to the urgency, it is no longer a "figure of speech" to claim that the EU is in "existential danger," Soros said. It's an obvious reality.

“The EU is in an existential crisis. Everything that could go wrong has gone wrong,” he said.

To escape the crisis, “it needs to reinvent itself.”

"The United States, for its part, has exacerbated the EU’s problems. By unilaterally withdrawing from the 2015 Iran nuclear deal, President Donald Trump has effectively destroyed the transatlantic alliance. This has put additional pressure on an already beleaguered Europe. It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality."

The only way to prevent an all-out collapse, Soros explained, would be a 30 billion euro ($35.4 billion) "Marshall Plan" for Africa that Soros believes would help stem the flow of migrants into Europe, something that, Soros finally admits, is one of the biggest problems facing Europe.  The EU, Soros believes, should use its "largely unused" borrowing authority to finance the plan.

“We may be heading for another major financial crisis,” Soros said explicitly.

The alternative, Soros claims, is further "territorial disintegration" of the EU as countries that have largely suffered as a result of the monetary union contemplate leaving. To prevent this, Soros says Europe must acknowledge and address the flaws of the euro system. Perhaps the most glaring of which is that the euro created an entrenched two-tiered system of debtors and creditors.

I personally regarded the EU as the embodiment of the idea of the open society. It was a voluntary association of equal states that banded together and sacrificed part of their sovereignty for the common good. The idea of Europe as an open society continues to inspire me.

But since the financial crisis of 2008, the EU seems to have lost its way. It adopted a program of fiscal retrenchment, which led to the euro crisis and transformed the eurozone into a relationship between creditors and debtors. The creditors set the conditions that the debtors had to meet, yet could not meet. This created a relationship that was neither voluntary nor equal – the very opposite of the credo on which the EU was based.

As some will remember, Soros Fund Management - the family office that manages Soros's money, which he has mostly dedicated to his "Open Society" network of NGOs - closed most of its long-EM positions after President Trump defeated Hillary Clinton. Of course, where Soros sees danger, others see opportunity. For example, Mark Mobius "un-retired" last month to open a fund that he hopes will take advantage of opportunities amid the EM carnage, as analysts continue to see EM as the area that's most vulnerable to a re-pricing in USD.

* * *

Read the speech in full below:

The European Union is mired in an existential crisis. For the past decade, everything that could go wrong has gone wrong. How did a political project that has underpinned Europe’s postwar peace and prosperity arrive at this point?

In my youth, a small band of visionaries led by Jean Monnet transformed the European Coal and Steel Community first into the European Common Market and then the EU. People of my generation were enthusiastic supporters of the process.

I personally regarded the EU as the embodiment of the idea of the open society. It was a voluntary association of equal states that banded together and sacrificed part of their sovereignty for the common good. The idea of Europe as an open society continues to inspire me.

But since the financial crisis of 2008, the EU seems to have lost its way. It adopted a program of fiscal retrenchment, which led to the euro crisis and transformed the eurozone into a relationship between creditors and debtors. The creditors set the conditions that the debtors had to meet, yet could not meet. This created a relationship that was neither voluntary nor equal – the very opposite of the credo on which the EU was based.

As a result, many young people today regard the EU as an enemy that has deprived them of jobs and a secure and promising future. Populist politicians exploited the resentments and formed anti-European parties and movements.

Then came the refugee influx of 2015. At first, most people sympathized with the plight of refugees fleeing political repression or civil war, but they didn’t want their everyday lives disrupted by a breakdown in social services. And soon they became disillusioned by the failure of the authorities to cope with the crisis.

When that happened in Germany, the far-right Alternative für Deutschland (AfD) rapidly gained strength, making it the country’s largest opposition party. Italy has suffered from a similar experience recently, and the political repercussions have been even more disastrous: the anti-European Five Star Movement and League parties almost took over the government. The situation has been deteriorating ever since. Italy now faces elections in the midst of political chaos.

Indeed, the whole of Europe has been disrupted by the refugee crisis. Unscrupulous leaders have exploited it even in countries that have accepted hardly any refugees. In Hungary, Prime Minister Viktor Orbán based his reelection campaign on falsely accusing me of planning to flood Europe, Hungary included, with Muslim refugees.

Orbán is now posing as the defender of his version of a Christian Europe, one that challenges the values on which the EU was based. He is trying to take over the leadership of the Christian Democratic parties which form the majority in the European Parliament.

The United States, for its part, has exacerbated the EU’s problems. By unilaterally withdrawing from the 2015 Iran nuclear deal, President Donald Trump has effectively destroyed the transatlantic alliance. This has put additional pressure on an already beleaguered Europe. It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality.

What Can Be Done?

The EU faces three pressing problems: the refugee crisis; the austerity policy that has hindered Europe’s economic development; and territorial disintegration, as exemplified by Brexit. Bringing the refugee crisis under control may be the best place to start.

I have always advocated that the allocation of refugees within Europe should be entirely voluntary. Member states should not be forced to accept refugees they don’t want, and refugees should not be forced to settle in countries where they don’t want to go.

This fundamental principle ought to guide Europe’s migration policy. Europe must also urgently reform the Dublin Regulation, which has put an unfair burden on Italy and other Mediterranean countries, with disastrous political consequences.

The EU must protect its external borders but keep them open for lawful migrants. Member states, in turn, must not close their internal borders. The idea of a “fortress Europe” closed to political refugees and economic migrants not only violates European and international law; it is also totally unrealistic.

Europe wants to extend a helping hand toward Africa and other parts of the developing world by offering substantial assistance to democratically inclined regimes. This is the right approach, as it would enable these governments to provide education and employment to their citizens, who would then be less likely to make the often dangerous journey to Europe.

By strengthening democratic regimes in the developing world, such an EU-led “Marshall Plan for Africa” would also help to reduce the number of political refugees. European countries could then accept migrants from these and other countries to meet their economic needs through an orderly process. In this way, migration would be voluntary both on the part of the migrants and the receiving states.

Present-day reality, however, falls substantially short of this ideal. First, and most importantly, the EU still lacks a unified migration policy. Each member state has its own policy, which is often at odds with the interests of other states.

Second, the main objective of most European countries is not to foster democratic development in Africa and elsewhere, but to stem the flow of migrants. This diverts a large part of the available funds to dirty deals with dictators, bribing them to prevent migrants from passing through their territory or to use repressive methods to prevent their citizens from leaving. In the long run, this will generate more political refugees.

Third, there is a woeful shortage of financial resources. A meaningful Marshall Plan for Africa would require at least €30 billion ($35.4 billion) annually for a number of years. EU member states could contribute only a small fraction of this amount. So, where could the money come from?

It is important to recognize that the refugee crisis is a European problem requiring a European solution. The EU has a high credit rating, and its borrowing capacity is largely unused. When should that capacity be put to use if not in an existential crisis? Historically, national debt always grew in times of war. Admittedly, adding to the national debt runs counter to the prevailing orthodoxy that advocates austerity; but austerity is itself a contributing factor to the crisis in which Europe finds itself.

Until recently, it could have been argued that austerity is working: the European economy is slowly improving, and Europe must simply persevere. But, looking ahead, Europe now faces the collapse of the Iran nuclear deal and the destruction of the transatlantic alliance, which is bound to have a negative effect on its economy and cause other dislocations.

The strength of the dollar is already precipitating a flight from emerging-market currencies. We may be heading for another major financial crisis. The economic stimulus of a Marshall Plan for Africa and other parts of the developing world should kick in just at the right time. That is what has led me to put forward an out-of-the-box proposal for financing it.

Without going into the details, I want to point out that the proposal contains an ingenious device, a special-purpose vehicle, that would enable the EU to tap financial markets at a very advantageous rate without incurring a direct obligation for itself or for its member states; it also offers considerable accounting benefits. Moreover, although it is an innovative idea, it has already been used successfully in other contexts, namely general-revenue municipal bonds in the US and so-called surge funding to combat infectious diseases.

But my main point is that Europe needs to do something drastic in order to survive its existential crisis. Simply put, the EU needs to reinvent itself.

This initiative needs to be a genuinely grassroots effort. The transformation of the Coal and Steel Community into the European Union was a top-down initiative and it worked wonders. But times have changed. Ordinary people feel excluded and ignored. Now we need a collaborative effort that combines the top-down approach of the European institutions with the bottom-up initiatives that are necessary to engage the electorate.

Of the three pressing problems, I have addressed two. That leaves territorial disintegration, exemplified by Brexit. It is an immensely damaging process, harmful to both sides. But a lose-lose proposition could be converted into a win-win situation.

Divorce will be a long process, probably taking more than five years – a seeming eternity in politics, especially in revolutionary times like the present. Ultimately, it is up to the British people to decide what they want to do, but it would be better if they came to a decision sooner rather than later. That is the goal of an initiative called Best for Britain, which I support. This initiative fought for, and helped to win, a meaningful parliamentary vote on a measure that includes the option of not leaving before Brexit is finalized.

Britain would render Europe a great service by rescinding Brexit and not creating a hard-to-fill hole in the European budget. But its citizens must express support by a convincing margin in order to be taken seriously by Europe. That is Best for Britain’s aim in engaging the electorate.

The economic case for remaining an EU member is strong, but it has become clear only in the last few months, and it will take time to sink in. During that time, the EU needs to transform itself into an organization that countries like Britain would want to join, in order to strengthen the political case.

Such a Europe would differ from the current arrangements in two key respects. First, it would clearly distinguish between the EU and the eurozone. Second, it would recognize that the euro has many unsolved problems, which must not be allowed to destroy the European project.

The eurozone is governed by outdated treaties that assert that all EU member states are expected to adopt the euro if and when they qualify. This has created an absurd situation where countries like Sweden, Poland, and the Czech Republic, which have made it clear that they have no intention to join, are still described and treated as “pre-ins.”

The effect is not purely cosmetic. The existing framework has converted the EU into an organization in which the eurozone constitutes the inner core, with the other members relegated to an inferior position. There is a hidden assumption at work here, namely that, while various member states may be moving at different speeds, they are all heading to the same destination. This ignores the reality that a number of EU member countries have explicitly rejected the EU’s goal of “ever closer union.”

This goal should be abandoned. Instead of a multi-speed Europe, the goal should be a “multi-track Europe” that allows member states a wider variety of choices. This would have a far-reaching beneficial effect. Currently, attitudes toward cooperation are negative: member states want to reassert their sovereignty rather than surrender more of it. But if cooperation produced positive results, sentiment might improve, and some objectives, like defense, that are currently best pursued by coalitions of the willing might attract universal participation.

Harsh reality may force member states to set aside their national interests in the interest of preserving the EU. That is what French President Emmanuel Macron urged in the speech he delivered in Aachen when he received the Charlemagne Prize, and his proposal was cautiously endorsed by German Chancellor Angela Merkel, who is painfully aware of the opposition she faces at home. If Macron and Merkel succeeded, despite all the obstacles, they would follow in the footsteps of Monnet and his small band of visionaries. But that narrow group needs to be replaced by a large upsurge of bottom-up pro-European initiatives. I and my network of Open Society Foundations will do everything we can to help those initiatives.

Fortunately, Macron, at least, is well aware of the need to broaden popular support for and participation in European reform, as his proposal for “Citizens’ Consultations” makes clear. The Trento Economic Festival, a large gathering organized by civil-society groups at a time when Italy did not have a government, will meet from May 31 to June 3. I hope it will be successful and set a good example for similar civil-society initiatives to emulate.

 

Comments

mtl4 MillionDollarButter Tue, 05/29/2018 - 09:38 Permalink

But since the financial crisis of 2008, the EU seems to have lost its way. It adopted a program of fiscal retrenchment, which led to the euro crisis and transformed the eurozone into a relationship between creditors and debtors. The creditors set the conditions that the debtors had to meet, yet could not meet. This created a relationship that was neither voluntary nor equal – the very opposite of the credo on which the EU was based.

 

George, I believe this means you wanted the ability to privatize the profits (ECB print the money) and socialize the losses (countries keep the debt)........which eventually leads to a debt explosion just as planned, right?!

In reply to by MillionDollarButter

Tarzan mtl4 Tue, 05/29/2018 - 09:51 Permalink

He's not worried, he's pretending to be, to cover his ass,

as he knows no matter how things appear, no matter the unexpected resistance, the failure of his candidate,

the DEBT Bomb, is still going exactly as planned, and their fall guy is in place in the Whitehouse. 

The trap is set, now we wait for the catalyst.  

In reply to by mtl4

Luc X. Ifer bigkahuna Tue, 05/29/2018 - 11:14 Permalink

The globalist left fascists are going down obviously and they will not go out without trying to burn the world together with their shattered ideological dreams and ruling ambitions.

So, practically the bastard is threatening supposedly free citizens for expressing freely their choices - isn't this terrorism?!

 

In reply to by bigkahuna

Got The Wrong No revolla Tue, 05/29/2018 - 12:56 Permalink

Please allow me to introduce myself
I'm a man of wealth and taste
I've been around for a long, long years
Stole million man's soul an faith

And I was 'round when Jesus Christ
Had his moment of doubt and pain
Made damn sure that Pilate
Washed his hands and sealed his fate

Pleased to meet you
Hope you guess my name
But what's puzzling you
Is the nature of my game

 

I stuck around St. Petersburg
When I saw it was a time for a change
Killed Tsar and his ministers
Anastasia screamed in vain

I rode a tank
Held a general's rank
When the blitzkrieg raged
And the bodies stank

Pleased to meet you
Hope you guess my name, oh yeah
Ah, what's puzzling you
Is the nature of my game, oh yeah
(Woo woo, woo woo)

I watched with glee
While your kings and queens
Fought for ten decades
For the gods they made
(Woo woo, woo woo)

 

I shouted out
Who killed the Kennedys?
When after all
It was you and me
(Who who, who who)

Let me please introduce myself
I'm a man of wealth and taste
And I laid traps for troubadours
Who get killed before they reached Bombay
(Woo woo, who who)

Pleased to meet you
Hope you guessed my name, oh yeah
(Who who)
But what's puzzling you
Is the nature of my game, oh yeah, get down, baby
(Who who, who who)

Pleased to meet you
Hope you guessed my name, oh yeah
But what's confusing you
Is just the nature of my game
(Woo woo, who who)

Just as every cop is a criminal
And all the sinners saints
As heads is tails
Just call me Lucifer
'Cause I'm in need of some restraint
(Who who, who who)

So if you meet me
Have some courtesy
Have some sympathy, and some taste
(Woo woo)
Use all your well-learned politnesse
Or I'll lay your soul to waste, mm yeah
(Woo woo, woo woo)

.....................

In reply to by revolla

FBaggins Got The Wrong No Tue, 05/29/2018 - 13:56 Permalink

Nice lyrics. I did not know George had been around for that long.

Things that everyone can be sure about with Soros: He is a Rothschild agent. He is a globalist. Despite his capitalist market manipulations he supports the world socialist movement. His methods are generally amoral, ruthless, and often violent. He is an arch deceiver and nations like Russia and Hungary have put a price on his head.

I feel his his doom and gloom speech was largely an effort to reduce confidence in the Euro. My intuition, not my reason so much, is that as an arch deceiver the entire Antifa movement is mainly an exercise in perception management and reverse psychology acting as a fake front to control the image of the left, and to turn people in the middle towards the establishment political choices. My view is that he is probably another instrument and major asset of the CIA.

Soros’s work has mainly been to incite and govern financial and political destabilization operations in nations opposing Rothschild-syndicate control and to further general nation-busting to assist global socialism. The Open Society movement is largely responsible for herding hundreds of thousands of displaced Muslims mainly out of war-torn Middle East nations, to flood into Europe. The operations mainly served to remove fighting-aged from their homelands who may have been tempted to defend their nations, to weaken the victim nations further, and of course to cause more division in the European nations suffering from the resulting culture shock. If the naturalized people in the host nations reacted negatively with the predicted culture shock, it would on one hand create more Western animosity towards Muslims in those nations which would serve Zio greater-Israel cause, and on the other hand it would invite more arrogant government supervision and control over its European subjects, paving the way for yet another tier of world government, world bank, preferential credit, taxes and control by the same grasping, megalomaniac elites running things.

In reply to by Got The Wrong No

NidStyles Zorba's idea Wed, 05/30/2018 - 00:08 Permalink

TopKek

 

So you can see me instead of just the police and security forces.

 

Let’s keep playing the game your way Kenosha, another felony another GPS track and arrest down the road. 

Line them up, put them in prison. Could just leave me alone, but you can’t figure it out. I went to that place even pulled the right girls. What did you do? You fucked me over out of spite. You pushed faggots and fat ugly bitches at me and expected me to play your faggot ass game. You’re mistaking your school for being larger than my scope of influence. 

 

I don’t see you making it very far with those girls after that behavior. One of them was already in my colors.

 

Figure it out. You’re playing for small crumbs. I am an asshole. I am not playing into your webs, nor are you going to get me to take a knee to you while you’re pretending to be in charge of your fiefdom. Respect goes both ways, and I earned my status the hard way.

 

 

Go away Frogs, I am not one of you. You just admitted to raping those girls as well. So there’s unnatural relations that violate the rules, and you violated the law by raping those girls. Great job, now pay your penance

In reply to by Zorba's idea

NidStyles FBaggins Wed, 05/30/2018 - 01:06 Permalink

Who exactly do you think you’re talking to? 

 

Soros, I want my damn money. 

 

Also, Moonman, I know you’re busy, but I would like to meet officially with you and company before the month is out? Can we make that happen? I just saw one of your clowns ride by so I know you’re paying attention.

In reply to by FBaggins

2Blondboys FBaggins Tue, 05/29/2018 - 20:56 Permalink

He admits he is for open borders.  So that is the goal in theory. He admits the EU treats the PIGS like crap.  A few nations benefited while most did not.  What is never discussed is who are these refugees?  So did the brightest and best come to Europe?  If so, doesn’t that create brain drain in the country they flee from?  If only the poor and desperate come, how on earth will they survive in Europe as they will never be employed, nor be able to provide for even themselves?  Soros and his band of progressives openly admit that robots will take the low skilled jobs leaving many more dependent on the government that will keep taxing people until they too are poor.  Who should take care of the refugees?  The people living paycheck to paycheck?  Eventually 20 percent will be taking care of 80 percent.

In reply to by FBaggins

Antifaschistische revolla Tue, 05/29/2018 - 14:47 Permalink

it's sort of funny...I couldn't count the number of times over the past 10 years that we've seen articles on ZH and elsewhere that had the theme of "if you think Greece is in bad shape, look at Italy, etc...".

yet, when something does start to crack...it "SHOCKS" the market.  Who is "the market" anyway.   I'd like to know where these "shocked" people have been for the past 10 years.

In reply to by revolla

Carl Spackler booboo Tue, 05/29/2018 - 21:06 Permalink

Soros will be in GITMO before Christmas!

 

I subscribe to the theory of the upcoming global equity meltdown and the ensuing Russia/China/USA simultaneous moves to the gold standard (e.g., NESARA) to create a new, global economic system and the depletion of the stolen value by the Illuminati blood lines (Soros, Rothschild, Rockefeller, Windsor, etc.).

In reply to by booboo

Griffin D503 Tue, 05/29/2018 - 16:50 Permalink

Soros lives on old fame for crashing the pound once up on a time.

https://en.wikipedia.org/wiki/Black_Wednesday

 

Since Soros is obviously running out of money to keep his migrant flood running, he should step up his game and rent a proper ship, rather than floating the migrants across in dinghies and inflated tire tubes.

This one is not being used and should fit the budget nicely.

https://en.wikipedia.org/wiki/SS_United_States

 

At least Soros would be burning money on a loosing war with class.

In reply to by D503

Chris2 Jack Oliver Wed, 05/30/2018 - 02:55 Permalink

1992 there was no public internet.

They didn't know who did this to them, now the do.

I figure they gave us the internet to make it a small world after all.

The unintended consequence was they themselves were exposed.

Decades of suppression of truth busted out, they shut down messages boards (I was the last person inside Yahoo message)

Notice CNN no longer has comments.

Pepe!

In reply to by Jack Oliver

chubbar D503 Wed, 05/30/2018 - 06:19 Permalink

Maybe this is news to that fucking Nazi bastard but the majority of the world is looking forward to the fucking assholes in Brussels failing! Newsflash but Globalism SUCKS! It steals national identities and if we aren't careful, we'll lose our cultural identities as well, thanks to this flaming asshole!

In reply to by D503

Dindu Nuffins chubbar Wed, 05/30/2018 - 08:05 Permalink

George Soros was never a Nazi. He has always been a International Marxist. Hitler was for closed borders and he rid Germany of the Africans that Jews imported (little known factoid of pre-war Germany). Sorry, can't make up facts just because you hate Soros and think Hitler was the biggest baddy ever like you've been instructed.

In reply to by chubbar

Kayman bigkahuna Tue, 05/29/2018 - 19:33 Permalink

Central Bankers printing and borrowing Trillions to save the corrupt skins of Globalist Billionaires, while sending the bill, via public debt, to small taxpayers.  Something wrong. Yes, George you are a fucking thief and have yet to be hanged.  That is what is wrong.

In reply to by bigkahuna

uhland62 bigkahuna Tue, 05/29/2018 - 21:33 Permalink

Jews don't believe in the afterlife, as far as I know.

If Soros really believes that, his 18 billion should be used to help, not fund meddling organisations like his NGOs. 

Soros always knows how to spend other people's money. Not so long ago he was telling the EU to spend gazillions for Ukraine, now it's Africa. The EU needs to abandon efforts in Ukraine as a big start.

In reply to by bigkahuna

Last of the Mi… LiteBeeer Wed, 05/30/2018 - 06:27 Permalink

Trump thwarted the globalist plan to bring Iran to the forefront as the major player in worldwide chaos for the sake of population protection in the form of asset reallocation. It's Soros' game plane and he does it very well.

If you want to take over a system of government and society, you must first destroy what is already in place through any means necessary. Propaganda, unlimited immigration, centralized monetary policy (Brussels) and of course corrupting any and all political processes at the grass roots level (Black lives matter).

It's what the unmarked plane loads of cash in the middle of the night were for.

Duh.

In reply to by LiteBeeer