The “Fix” for a Broken Economy Will Bring Big Rewards

Andy Snyder|December 13, 2021

April 18, 2013, was a bit of an embarrassing day for Reuters.

That’s the day the trusted news outlet told the world that George Soros had died.

His prematurely published obituary was online for some 30 minutes… plenty long enough for it to be recorded in the annals of web history.

It was a blessing for Soros. Wouldn’t we all love to see in advance what the word of record about our lives will be?

We’ve long presumed to know our last words… “Hey y’all, watch this!” But we don’t know how we’ll be remembered or what will be the lead of our final story.

That bugger Soros does.

Like many would hope and expect, it wasn’t pretty.

From Reuters’ embarrassing mistake…

George Soros, who died XXX at age XXX, was a predatory and hugely successful financier and investor, who argued paradoxically for years against the same sort of free-wheeling capitalism that made him billions.

Sounds about right – a rich guy griping about the things that made him rich. Fellow billionaire Elon Musk joined Soros’ ranks last week after griping about federal subsidies. You know… the kind that helped put Teslas on the road.

But we continue with Reuters’ ode to the undead…

He was known as “the man who broke the Bank of England” for selling short the British pound in 1992 and helping force the United Kingdom to withdraw from the European Exchange Rate Mechanism, which devalued the pound and earned Soros more than $1 billion (650 million euros). And his Soros Fund Management was widely blamed for helping trigger the Asian financial crisis of 1997 by selling short the Thai baht and Malaysian ringgit.

There’s no mention of the man’s more modern work of shorting the falling culture of the United States or profiting while seeming to purposely accelerate its fall. But we reckon updated drafts have all the finer, sordid details.

We don’t bring up the old man’s obituary today to pick on his politics. (We don’t have that kind of space.) We bring it up because what he did then has some peculiar similarities to what we’re seeing now.

Breaking the Dollar

If you know much about how the pound lost its luster, you know there were two things that brought it down…

Interest rates set too low and surging inflation.

You know… the two dastardly things we’ve been fretting about in this column for ages now.

Everybody knew England’s scheme to tie its currency to Germany’s was a pipe dream. They were two different economies with two different trajectories. And yet the pound and the deutschmark were tied together like two great pals.

London did its best to keep the ties from snapping.

It desperately pushed rates higher, despite troubling signs of recession. It spent money wildly, trying to keep the gears turning. And it bought back its own currency, putting its thumb on the supply balance as sellers poured in on the other side.

As it all unfolded, Soros looked for his chance. He poured millions into his bet against the pound. He made savvy moves in the interest rate market. And, perhaps the most powerful weapon of all, he convinced the market to follow his lead.

In the end, he said he was simply “enforcing” natural market dynamics.

It worked.

The market rewards folks for fixing what’s broken. Soros made more than a billion bucks on the deal.

So what’s next?

R.I.P.

In many ways, the situation here in the States today looks quite similar.

That’s the trouble.

Rates need to rise (desperately), but they can’t. That will pull a stimulus-addicted economy into the chasm.

Inflation is surging. But Washington wants and needs to keep spending.

The only fix, at least for now, is artificial. Prop it all up by having one side of the government buy the other side’s debt.

Everybody knows it won’t last. It can’t.

But few folks are bothering to ponder what or who will break it.

In 1971, Nixon shocked the world when he broke the ties between the dollar and gold.

In 1992, Soros forced England to make a similar shocking announcement.

And here we are once again. The same pent-up forces are building pressure once again.

We believe a “Powell Shock” is now inevitable. The current path is unsustainable.

The man in charge of it all must do something drastic. That means crypto… gold… and, most definitely, select stocks remain smart speculations.

We don’t know who or what will “enforce” the market’s rules next.

But we’re positive those rules will be enforced.

And when they are… the folks who paid attention will get rich.

George’s obituary proves it.

Rest in peace, Mr. Soros.

Note: There’s a good chance the “Powell Shock” could come as soon as next week – on December 14. That’s when a key meeting will take place. It could change the way you look at money forever. Click here for the urgent details.