George Soros, the world's greatest trader, continues to warn of an impending global economic crisis, which could culminate in unthinkable consequences. In a Newsweek exclusive, the legendary investor says, “I am not here to cheer you up. The situation is about as serious and difficult as I've experienced in my career." In elaborating on the nature of the crisis, Soros tells Newsweek that “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”
Undeniably, Soros' ominous warnings accurately reflect readily observable trends which are gaining momentum today. Although he does not claim to know specifically how the future will play out, and holds out hope that the current financial and geopolitical turmoil will catalyze positive change, Soros offers up a rough guide for what the potential downside may look like. In his view, parallels can be drawn between the crumbling financial system in the developed world, as evidenced by the 2008 meltdown and the current global debt crisis, and the end of communism in the Soviet Union.
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