Current market crisis ‘worst in 60 years’: Soros

In his comment piece, Soros warned that while a global recession could be held off by strong growth rates in the developing world, the danger was that the resulting political tension from a rebalancing of international economic power could “plunge the world into recession or worse.”

His remarks come a day after the U.S. Federal Reserve surprised observers by cutting interest rates by 75 basis points to 3.50 percent, providing some much-needed relief to battered financial markets that had suffered heavy losses in recent days.

“The current crisis is the culmination of a super-boom that has lasted for more than 60 years,” Hungarian-born Soros wrote in the business daily.

“Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong counter trend,” he continued, in his op-ed titled “The worst market crisis in 60 years”.

“So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the U.S. and the rise of China and other countries in the developing world.

“The danger is that the resulting political tensions, including U.S. protectionism, may disrupt the global economy and plunge the world into recession or worse.”

Separately, Soros warned Wednesday that it would to be difficult for the United States and Britain to avoid sliding into recession.

Speaking on BBC radio, Soros also said he thought monetary authorities should be ready to rescue markets when they were in turmoil and should impose more regulation, not less.

“Markets have been left to their own devices and the authorities came to rely on the markets to right themselves,” Soros said.

“They ought to have known better,” he added. “They ought to know that the markets don’t necessarily right themselves.”

Asked whether he thought the American and British economies were heading for recession, Soros replied: “I think it will be very difficult to avoid it.”

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