Soros backs US’ rescue plan, says recession on the way

Soros backs US’ rescue plan, says recession on the way
PTI
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First Published: Mon, Oct 13 2008. 01 34 PM IST
Updated: Mon, Oct 13 2008. 01 34 PM IST
New York: Billionaire investor and entrepreneur George Soros backed America’s plan to buy equity in banks but forecast a ‘quite serious recession´ on the way.
The real economy, he said, is now going to enter into quite serious recession, “But if you do the right things, then you could see how you could come out of that recession.
In an interview with ABC News, he agreed that the United States would have less power in the world and perhaps American citizens would have less money in the pocket as a result of the crisis.
In the last 25 years, Soros said Americans have basically consumed six to seven per cent a year more than they have produced.
As a result, he said, “Other people, the Chinese, the oil producing countries have built up a dollar reserve which they are now going to covert in real assets. So they become wealthier and we will have more debt,” he added.
The US consumer, would cease to be the motor for world economy.
“So we will need another motor. And I think that problems that confront with regard to energy, global warming, energy dependence will require very large investments. Those will replace the consumer as the driving force for the economy in the next few years,” he told the interviewer.
If these problems are not confronted, there would be large unemployment, he said, adding that human resources can be put to good use if the country now confronts these pressing problems.
The country, would have to pay for excesses of the last 25 years because the current crisis has been generated inside the financial system, he said.
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First Published: Mon, Oct 13 2008. 01 34 PM IST