The CEU Lectures: Lecture Five, George Soros on The Way Ahead
On Friday, October 30, 2009, George Soros delivered the fifth of “The CEU Lectures,” on “The Way Ahead.”
“We are at a moment in time in which the range of uncertainties is unusually wide” stated at the beginning of his fifth a final lecture George Soros. “We have just passed through the worst financial crisis since World War Two, and this crisis is quantitatively much larger and qualitatively different from other financial crises, ” he added.
“In fact, the magnitude of the credit and leverage problem we face today is even greater than in the 1930s, ” observed Soros. In 1929, total credit outstanding in the United States was 160% of GDP. It rose to 250% by 1932; in 2008 we started at 365% – and this calculation does not take into account the pervasive use of derivatives which was absent in the 1930s.
“I regret to tell you that the recovery is liable to run out of steam and may even be followed by a “double dip” although I am not sure whether it will occur in 2010 or 2011,” said George Soros.
“The confusion is not confined to the financial sphere; it extends to the entire international arena,” he noted. “To put it bluntly, the United States stands to lose the most and China is poised to emerge as the greatest winner of the recent crisis, ” he further argued. “The two forms of economic organization, the state capitalism of China and international capitalism are in competition with each other,” he said. Soros went on to say that the process of changing the system needs to be initiated by the United States, but China and other developing countries ought to participate in it as equals.
Video and transcript
- See this lecture and Q&A session on the Financial Times website here: http://www.ft.com/soroslectures
- Additional information about the series and full transcripts are provided by the Financial Times on the following summary page: http://www.ft.com/indepth/soros-lectures