The wealthy investors who make up the peer-to-peer learning group TIGER 21 like to invite heavy hitters, such as Mohammed El-Erian, Carl Icahn and Jim Rogers, to their Headliner Lunches. In December, George Soros joined that illustrious roster, according to a statement from the group released Wednesday.
In an interview with Robert Johnson, executive director of the Institute for New Economic Thinking, Soros discussed the economy and issues affecting investments and world markets, and reacted to some members' predictions for the year ahead.
Soros said the current economic environment "is about as serious and difficult an environment as I have experienced in my career." The current financial crisis is a direct outgrowth of the financial crisis of 2008, he said. "In 2008, when Lehman went bankrupt, the financial system did collapse. The week between Lehman filing and the announcement of TARP were memorable days where one market after another ceased to function."
Now the viability of sovereign debt is in question, he said. In Europe, flaws in the euro's construction are being exposed. However, he pointed out, the euro crisis is not a currency crisis, but rather a banking crisis.
Soros emphasized that the current crisis is more severe and more lasting than the crisis in 2008. At that time, the institutions that were needed to control the situation existed, whereas in Europe today, there is a central bank but no treasury.
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