- The Washington Times - Tuesday, May 20, 2003


Billionaire financier George Soros said yesterday he was selling the dollar as he criticized U.S. Treasury Secretary John W. Snow for allowing the currency to slide.

Mr. Soros told CNBC financial television that Mr. Snow, who has made a slew of comments apparently loosening an eight-year U.S. “strong dollar” policy, was making a mistake.

“This is the wrong policy,” he said.

As a result of Mr. Snow’s shift, the Hungarian-born U.S. financier said he was getting out of dollars.

“I have to disclose that I now have a short position on the dollar because I listen to what the secretary of Treasury is telling me. So, who am I to stand in the way?” he said.

The selling position had been taken “relatively recently.”

“We have been and we continue to be selling the dollar,” Mr. Soros said. He was selling the dollar against the euro, the Australian dollar, the Canadian dollar, the New Zealand dollar and gold.

Asked how low the dollar could fall, Mr. Soros said: “I think that the secretary of Treasury was somewhat irresponsible by talking down the dollar, and I will try to be more responsible, so I will not make any forecasts.”

A Hungarian who fled his country during the 1956 uprising against communist rule, Mr. Soros made his fortune speculating on the financial markets — famously hastening the collapse of sterling during Britain’s 1992 crisis over participation in the European monetary union.

In recent years, he has delegated management of his Quantum Fund to concentrate on his philanthropic foundations, which function in 30 countries around the world with the self-proclaimed goal of “transforming closed societies into open ones.”

Mr. Soros said Mr. Snow had clearly made a change in U.S. policy.

“He has definitely, sort of, announced a change of American attitudes, and I think it is a mistaken one,” Mr. Soros said.

“It is a beggar-thy-neighbor policy, because it will certainly hurt all Europe, and I think this administration is very happy to hurt France and Germany,” Mr. Soros said.

Several economists have said the newfound strength of the euro will push Europe closer to recession by hurting its exports. The stronger euro also makes imports to the Europe cheaper, raising deflation risks.

The dollar fell for a third day against the euro to $1.172 — nearly a four-year low.

“But I don’t think it is going to help the United States very much because — all right, it will make maybe American exports more competitive, but to whom are we going to export?” Mr. Soros asked.

“The United States is a consumer of last resort, and Europe, particularly since it is slipping into recession, cannot take the place of the United States,” he said. “So, effectively, this step is really, sort of, depressing the global economy because it is depressing Europe without helping the United States.”

A plunge in stock markets Monday showed what investors thought of the new U.S. policy, he said.

Mr. Soros also criticized President Bush’s tax-cut plans, which include abolishing dividend taxes, even though he believed it was proper to run a deficit to escape recession.

“However, this move is not designed to have much effect now. It is meant to have an effect over an extended period and is basically using the recession to redistribute income to the wealthy,” he said.

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