NewsMax.com
Wednesday, Jan. 31, 2001

The U.S. economy is in the midst of a recession that threatens the world economy, according to one financial guru, international currency speculator and global do-gooder George Soros.

"Most likely we are in a recession right now," Soros said at a meeting of top international corporate and government officials in Davos, Switzerland, contradicting the opinions of many of the economists present who believe that Federal Reserve Board Chairman Alan Greenspan will somehow pull a rabbit out of a hat and avert an economic downturn in the United States.

Soros said recent and expected interest rate cuts by the Fed chairman were probably too little and too late, according to the London Times.

"The Fed is aggressively reducing interest rates," he told the financial power brokers. "I don’t know how much they need to move. They don’t know how much they need to move."

The Times reported that Soros added he was "pretty convinced" that, if anything, the powerful U.S. central bank, helped by "a great deal of freedom to move," would do too much rather than too little in response to the threat of a U.S. crisis.

"They are more likely to overshoot," he said. "They are determined to do whatever is necessary."

Turning to the world financial condition, Soros noted: "Obviously the Japanese system is sick. They are regressing again. The banking systems in Korea, Thailand and Japan are not in good shape."

A recession in the U.S. could worsen the financial woes of those nations, he warned, and could increase criticism of globalization.

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