Re: [A-List] US economy: Soros vs. dollar

["Gary Santos" <evs@xxxxxxxxxxxx>]

Michael,

I think the Fed wants the ECB, Canada, etc. to step in and, together, stop
the Euro rise. But, will the ECB step in? It's a drama that will just unfold
before our eyes.

Soros wants others to come in. He said that he is in. His cost is 1.18 or
below. He wants others to buy the dollar above 1.18 or stop selling Euros
thereby lowering his exposure. Soros will have to put in $200 billion over a
year to hold it at present levels for one year. He will be playing an
increasing amount of Euro as time passes. I wonder how much he has cashed
out already?

What did Henry say? That the currency market is ruling over the US-EU
economies -- affecting the whole world in the process?

Gary

----- Original Message -----
From: "Michael Keaney" <michael.keaney@xxxxxx>
To: <a-list@xxxxxxxxxxxxxxxxxxx>
Sent: Wednesday, May 21, 2003 8:18 PM
Subject: [A-List] US economy: Soros vs. dollar


Soros bets against the dollar

David Teather in New York
Wednesday May 21, 2003
The Guardian

George Soros, the billionaire investor dubbed "the man who broke the pound",
yesterday added to the mounting pressure on the dollar when he admitted
publicly he was betting against the currency.

In an interview with US cable channel CNBC, Mr Soros disclosed that he had
recently begun to sell. "I now have a short position against the dollar," he
said. "I have listened to what the secretary of the treasury is telling me.
Who am I to stand in the way?

"We continue to sell the US dollar against the euro, the Canadian dollar,
the Australian dollar, the New Zealand dollar and gold."

Mr Soros played a significant role in forcing the pound from the European
exchange rate mechanism in 1992 when he bet against sterling. His firm was
said to have made $1bn after the pound was ejected.

US treasury secretary John Snow signalled a policy shift at the weekend,
suggesting he was at ease with the recent slide in the dollar. He said the
currency's 20% decline against the euro over the past year was "really
fairly modest".

That was interpreted as a reversal of the White House's strong dollar policy
and an indication that the treasury will not be shoring up the currency by
buying in the open market. The euro was yesterday trading a fraction below
Monday's four-year high of $1.1738, just below its January 1999 launch
price. The dollar fell further against the yen after the Bank of Japan said
it would ease monetary policy again. The BoJ has spent billions to halt the
yen's rise against the dollar.

Mr Soros was fiercely critical of the White House policy shift. "It's a
beggar thy neighbour policy," he said. "I think [Mr Snow] was somewhat
irresponsible by talking down the dollar."

He said the policy shift was an attempt to stimulate the US economy at the
expense of other countries. "This administration is happy to hurt France and
Germany but that won't help the US very much. It will make US exports more
competitive, but to whom are we going to export?"

He joined another billionaire, Warren Buffett, in a stinging attack on the
White House tax cut plan centred on the ending of tax on dividends. The
senate is expected to approve the tax cuts by next week.

"The administration is basically using the recession to redistribute income
to the wealthy," Mr Soros said. Mr Buffett dubbed the cuts "voodoo
economics" in yesterday's Washington Post.

Forecasters are increasingly concerned about the Bush administration's
stewardship of the economy. A quarterly survey of economists yesterday from
the Federal Reserve Bank of Philadelphia found them cutting full year
forecasts for GDP growth from 2.5% to 2.2%.