May 2015 – BEIJING – Global conflict has increased in recent years, with much of the Mideast in flames and historic rivalries rising to the surface in parts of Europe and Asia too. Hedge fund legend George Soros is concerned that it all could end in catastrophe — another world war. And China might prove to be the flashpoint, the chairman of Soros Fund Management said at the Bretton Woods Committee Annual Meeting at the World Bank, MarketWatch reports.
If the Asian titan fails in its attempt to shift the economy’s focus to domestic demand from exports, Soros sees the “likelihood” that Chinese leaders will resort to foreign conflict to keep themselves in power and prevent the country from falling apart. And if China chooses the wrong adversary, look out. “If there is conflict between China and a military ally of the United States, like Japan, then it is not an exaggeration to say that we are on the threshold of a third world war,” Soros stated.
The solution: the United States should let China’s yuan join the International Monetary Fund’s basket of currencies, he argued. And in return, China should reform its economy, including acceptance of the rule of law. Without such an agreement, “there is a real danger that China will align itself with Russia politically and militarily, and then the threat of third world war becomes real, so it is worth trying.” Meanwhile, only six years after the end of the worst financial crisis since the 1930s, some experts are worried another one may be on its way.
They are “warning that the global community has failed to learn the lessons of the Greek debt crisis — or even of Argentina’s default in 2001, the consequences of which are still being contested furiously in courts on both sides of the Atlantic,” writes The Guardian’s Heather Stewart. Some of the concern stems from the soaring dollar, plunging oil prices and the Federal Reserve’s preparation to raise interest rates. The dollar reached multi-year highs against a range of currencies in recent months, oil prices have hit six-year lows and many economists expect a Fed rate move later this year. “We’re going to have another financial crisis,” Ann Pettifor, director of Policy Research in Macroeconomics, told Stewart. “Brazil’s already in great trouble with the strength of the dollar; I dread to think what’s happening in South Africa; then there’s Malaysia. We’re back to where we were, and that for me is really frightening.” –Newsmax