Is George Soros Backing the Obama Campaign Because He Intends To Make a Fortune Shorting the Dollar?

Question

It wouldn't be the first time George Soros trashed an entire nation in order to get rich. Ask the Thai people what happened in 1997 after he backed a new political party in Thailand.

Answer 1

Soros and Obama....two corrupt individuals.  

Answer 2

Soros is a pig.  In reality, all he does is make people lose elections.

Answer 3

No, I don't think so.  Soros can make money without directly participitating in government affairs, as speculator, he can speculate either way no matter who wins.

Somebody answered about ideology and I think that is the reason why Soros supports obama.  Soros as a wealthy trader/speculator also founded an institution ( i forgot the name) that support and promote democratic ideals (hence anti-communist/autocrats/dictator/fascis...  

As a graduate of LSE,  I assume he have a good grasp in analyzing Macroeconomic condition ( also, he have a couple of analyst working under his hedge fund) and can bet shrewdly where the countries currency will go.

Answer 4

I don't think it's anything so sinister. I think he supports Obama more out of ideology.

Soros' speculative attacks are only successful in a fixed exchange rate regime - something the US is not a party to. If he were to mount a speculative attack by shorting the dollar, it wouldn't harm our nation in the same way that it harmed Malaysia, Singapore, or Britain because we are under no committment to prop up the dollar. If Soros speculates that the dollar will fall, others speculators are likely to follow suit, devaluing his put options. Note that in 2006 he attempted to short the dollar and lost millions - mainly because he didn't anticipate China's commitment to the managed float, which has prevented the appreciation of the renminbi from depreciating the dollar.

For Soros to make money by shorting the dollar, he'd have to take a position that the dollar will not only be weaker in the future, but weaker than it is expected to be. Obama's economic plan wouldn't do much to help the dollar, but it also wouldn't create such a dramatic turnaround as to make the Fed ease off of its anti-inflationary policy. As such, we can expect higher interest rates, which means a stronger dollar (since dollar-denominated investments carry a higher rate of return), which means Soros' taking a short position on the dollar would be foolish.

The Thai currency collapse (which later triggered the Asian Currency Crisis of 1997) was more due to poor government planning and foolish counseling by the IMF than any efforts by Soros. The governments of Malaysia and Thailand called Soros an economic criminal, but he was only the most visible person in the speculative attack on currencies.

As with Black Wednesday in Great Britain, Soros took advantage of arbitrage opportunities in fixed exchange rate regimes. That speculative attacks occur is an argument against fixed exchange rate regimes (which the US is not currently a part of) rather than against speculators. Joseph Stiglitz wrote a very interesting and thorough account of his experience of the Asian Currency Crisis in "Globalization and its Discontents".

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What's with the thumbs down? Do you want me to agree with you? It is not possible for a speculative attack against a freely floating currency. No amount of sinister conspiracy is going to change that.

Answer 5

He already has made  a fortune shorting the dollar, and Bush has been president while it fell over 20% in value, not Obama.