George Soros Perception of Global Markets Replication of 2008

George Soros, a philanthropist, and billionaire created the Open Society Foundation with the aim of improving the lives of individuals globally. Among other achievements, George Soros managed to bring accountability and transparency to extraction firms internationally. He is also the author of over fourteen books, including The Tragedy of the European Union (2014) among many others. Due to his vast knowledge on economics as a result of graduating from the London School of Economics, his essays and articles on economics, globalization and politics consistently appear in major magazines and newspapers throughout the world.
According to George Soros on Bloomberg, the global markets current crisis seems to replicate 2008 and for this reason, investors must remain cautious and vigilant China has been experiencing a serious problem on adjusting due to its currency devaluation. As a result, it has been transferring problems globally. In 2008, the world experienced severe financial crisis originating from the downward sinking of home prices which spread fast to the whole financial sector of the United States, and then financial markets internationally. The crisis did not only affect the financial sector but also negatively impacted on firms that relied on credit. Since banks could not trust individuals to pay back loans, they stopped granting loans forcing enterprises to regulate their cash flows. Due to the low credit level, the investment levels went down which then reduced the level of the Gross Domestic Product (GDP). The share prices fell throughout the world. The Dow Jones lost 33.8% of its worth in the U.S.

Germany, China, and Japan among many countries matched to the American financial crisis new trend as they got locked in recession. The export-oriented manufacturers from China and Japan suffered because their primary markets, the U.S, and Europe, reduced their demand for their products. The worldwide unemployment rate rose with the United States hitting 7.2% from 4.4% China did not experience double growth rate as seen before. Moreover, the developing countries lost their markets abroad and the foreign direct investment (FDI), withered. Since none of the world’s largest economies were economically stable, there existed no engine to bring out the world out of its recession. At the beginning of 2016, George Soros echoed the financial problems as seen in 2008. In China, housing boom resulted in real estate falling prices. The Chinese investors turned to stocks which led to stock index fall. The Chinese government then bought its stock market leading to a devaluation of the currency Therefore, the Chinese economy being one of the largest globally, it could trigger the 2008 global market crisis.