All The Theories About Recessions May Be True. George Soros Thinks This New Meltdown Has A Lot To Do With China.

Economists know that the 2008 Great Recession on was cause by the subprime mortgage market debacle. The 1970s recession was caused by the rise in oil prices, and the 1920s recession that spilled over to the 1930s was a product of the mass movement of an agricultural based economy moving into an manufacturing-based economy. According to billionaire investor and economic analyst, George Soros many factors come into play when a recession becomes a reality. 

The word “recession” implies lack of growth and, in some cases, complete stagnation when it comes to product growth on Soros believes a global recession is the best way to describe what is happening in a global market that consists of 7 billion people.

George Soros doesn’t throw the term “recession” around just to get attention or to be interviewed. George Soros is concerned about the state of the world’s market, and he has demonstrated his ability to help that market by contributing more than $6 billion over the years to make the world a more democratic and open place. Soros recently told that his Open Society Institute tries to bring the world together not tear it apart. Capitalism is a double-edged sword according to Soros. On one hand, capitalistic countries work together and, on the other hand, they can tear each other apart. 

Brazil and China’s relationship is a good example of that double-edged sword. When commodity prices started to rise in 2012, China got nervous. Their manufacturing-based economy was built on cheap prices and barely passable quality. When raw material prices and labor unrest got together, China’s economy started to stumble, and China cut their Brazilian import orders. Brazil’s economy sank to its lowest level in more than 50 years. Mr. Soros told that what China did to Brazil will be done to other countries in different ways. Soros said Asian countries are feeling China’s pain and weak currency now.

But Soros also said China’s lackluster economic growth isn’t the only reason he is predicting a global recession that could be the worst on record. The European Union is also playing a featured role in the downturn. European Leaders can’t agree on much of anything, so it was no surprise when the refugee crisis torn a large hole in the body of the Union. The open border policy that was the foundation for forming the EU was violated by some members that wanted no part in the plan to resettle migrants. And when the terrorists’ attacks in Germany, France, and Brussels were analyzed, the open borders in all member countries were closed. 

Mr. Soros thinks this new recession is going to change the way countries do business with each other in the future, and he may be right. He usually is.

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