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George Soros: The Investor and the Boogeyman

george-soros-the-investor-and-the-boogeyman

Love him or hate him, George Soros has made his mark on the financial and political world like no other.

This person is the “man who broke the Bank of England.” He’s also got a more sinister nickname; he’s the boogeyman of the far right.

Let’s talk Soros, the investor, and Soros, the man who soaks up controversies even to this day.

The Holocaust Survivor

Before Soros became one of the world’s most lucrative investors and a boogeyman to some, he was a Holocaust child.

Soros lived through the Nazi occupation of Hungary (1944 to 1945). This dark time brought the murder of 500,000 Hungarian Jews.

To escape, the Soros family secured false identity papers to disguise their background. According to Soros:

“Instead of submitting to our fate, we resisted an evil force that was much stronger than we are—yet we prevailed.”

george-soros-the-investor-and-the-boogeyman

From Hungary to the UK to the US

In 1947, Soros left Hungary as the Communist power started gaining power in his home country.

He went to London to work as a railway porter and night-club waiter, while also studying at the London School of Economics.

In 1956, he went to the US and plunged into the world of finance and investments.

It was in this time that he started making the name George Soros a prominent one on Wall Street and around the world.

The Investor: Breaking BoE

Arguably the most defining feature of George Soros’ investing career happened in the 1990s.

Following the events of World War Two, countries wanted to find security with each other. In line with this goal, the European Union was born.

But before the EU, there was the European Exchange Rate Mechanism (ERM).

Under the ERM, countries agreed to fix their exchange rates with each other rather than “floating” their currencies.

The British pound, then, had to fix with the Deutschmark, which was the strongest currency in the region back then.

To cut a long story short, the ERM quickly showed signs of defect. The British pound weakened against the Deutschmark. All the while, Soros was building up his short position on the pound.

As the pound traded within unsustainable levels, the Bank of England wanted to prop up the currency through currency-buying programs and interest rate hikes.

But it was already too late for the BoE. A series of unfortunate events led the pound lower, and more investors shorted the royal currency.

It culminated in the BoE’s exit from the ERM. Accepting defeat, it said it would float its currency on the open market.

Soros, along with other speculators, took a decisive victory. The Holocaust survivor, now one of the most influential people in the world, raked in billions of dollars.

george-soros-the-investor-and-the-boogeyman

Reflexivity Strategy

It was under this string of events that Soros cemented his reputation and philosophy as an investor.

Soros believes that the market and its participants could influence and therefore drive the events that they anticipate.

In the runup to the now infamous Black Wednesday, investors were anticipating the pound to weaken due to the faulty ERM. As a result, short positions flooded the pound. Soros led the pack and fulfilled the prophecy which he has made.

Most people agreed that it was a feat, but others argued that what Soros did was manipulate the currency market.

It was only one of the controversies surrounding the investor Soros.

george-soros-the-investor-and-the-boogeyman

The Philanthropist: Open Society Foundations

George Soros’ personal history reflects a lot in his choice of advocacies and principles. As a kid born in the troughs of the Holocaust, Soros suffered discrimination as a Jew.

It’s not surprising, then, that he would build his life’s work upon the Open Society Foundations.

Soros has given away over $32 billion of his money to the OSF, supporting its work all over the world.

The OSF supports individuals and organizations worldwide for various causes, including freedom of expression, minorities, and human rights.

The foundation spends $94 million per year in 100 countries to promote those values. In the US, Open Society pours $150 million a year to finance groups that support those ideals.

The Boogeyman: Involvement in Politics

Because of the massive financial support and the progressive ideals that Soros pursues, the OSF has gathered criticisms among considerable names in finance and politics.

It would be difficult to list down all the accusations and criticisms that Soros has faced.

Generally, however, conspiracy theorists accuse Soros of being a shadowy figure that pulls the strings in politics and the financial world.

Istvan Csurka, a Hungarian populist, described Soros as a puppet of Jerusalem. In Slovakia, President Jan Slota alleged that Soros was sending “dirty money.”

His involvement in politics is perhaps more evident with his campaigns against politicians.

Campaign Against George W. Bush

Soros dabbled even more in politics in the early 2000s, when he opposed the then-president George W. Bush. He went as far as spending more than $27 million to stop Bush’s 2004 reelection.

It was unsuccessful.

Yet, his campaign triggered fury from critics and people from the far right. Right-wing commentators lambasted the investor—now the boogeyman of far-right politicians.

They called him “an extremist” and a “puppet master.” After Bush, the battles only got worse.

2016 Election

The 2016 election was a massive win for the Republicans. For George Soros, it was the start of another lengthy struggle.

Soros supported Democratic candidate Hillary Clinton in the 2016 elections. He funneled at least $25 million in donations to mobilize Democratic voters to boost Clinton’s candidacy.

At the same time, he criticized Trump’s “America First” campaign, which lies in stark contrast to Soros’ globalism.

Before the election ended, Trump spoke in a TV ad and commented on “global special interests” that wanted to take control of the US. Images of Soros and financial leaders flashed on the screen as Trump delivered the message.

George Soros didn’t expect Trump to win the elections. But Trump won.

According to Soros, he has redoubled his efforts to be in the fray, even with this defeat.

george-soros-the-investor-and-the-boogeyman

Reconciling the Investor and the Boogeyman

George Soros continues to be controversial even to this day.

Hungary’s Prime Minister Viktor Orban has accused Soros and the Open Society of engineering campaigns against national border and sovereignty.

Pro-Brexit voters in the United Kingdom hate Soros. One can say the same for Eastern European populists. In the United States, Republicans continuously criticize the investor.

Whatever is up for Soros’ future, it’s undeniable that Soros is a hugely influential figure. Whether it’s the investing world or the political world, Soros is a force to reckon.

The investor in him makes sure that the power is with the market participants. Their collective ability to move the market can reach various heights.

The philanthropist (or boogeyman, for the far right) in him blurs the line between the financial and political. What remains is the global stage where these concepts intersect. And Soros will continue to make his mark in that stage.

Who is George Soros? - BBC News

Comments

Amanda Bliss (author) from United States on October 31, 2019:

Thanks!

JC Scull from Gainesville, Florida on October 31, 2019:

If there is going to be a "boogeyman", then I guess we could do a lot worse. I'll take Soros any day of the week.

Good article.