A Repeat of Black Wednesday? Soros Bets $2 Billion On Stock Market Collapse: Massive Inflation Ahead

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george-soros bet

September 16th 1992 is the day that the British government had to withdraw the pound sterling from the European Exchange Rate Mechanism because it was unable to keep the pound above it’s agreed lower limit. The reason for the turmoil in 1992 was George Soros, who made over a billion pounds sterling by short-selling sterling on the markets.

Definition of short-selling:

The sale of borrowed securities. In a short sale, one borrows securities, usually from a brokerage, and sells them. One then buys the same securities in order to repay the brokerage. Selling short is practiced if one believes that the price of security will soon fall. That is, one expects to sell the borrowed securities at a higher price than the price at which one will buy in order to return the securities. Selling short is one of the most common practices of hedge funds. This is also called establishing a bear position.

Soros became known as the man who broke the Bank of England. The devaluation of the sterling cost the United Kingdom over £3.3 billion. As early as spring 1992, Mr Soros had decided that the pound would have to be devalued because it had been pushed into the ERM at too high a rate. He knew that the Bundesbank favoured a devaluation of both sterling and the Italian lira and believed it would have to happen because of the disastrous impact that high British interest rates were having on asset prices. Mr Soros spent the next few months building up a position from which he would profit from that devaluation. He borrowed sterling heavily, reportedly to the tune of £6.5 billion, and converted that into a mixture of Deutschmarks and French francs.

On Black Wednesday, Mr Soros’s bet paid off. In the following days, he unwound his positions, paying back his original borrowings and ending with a profit of around £1 billion. As a parallel play, Mr Soros bought as much as £350 million of British shares at the same time, gambling that equities often rise after a currency devalues. (source)

Regulatory filings show that Soros has increased his bet against the US stock market by 600% in the second quarter. He has taken out a $2.2 bn bet that the S&P will fall.

From Newsmax:

Billionaire investor George Soros has increased his financial bet that U.S. stocks will collapse to more than $2 billion. The legendary hedge fund manager has been raising his negative bet on the Standard & Poor’s 500 Index since late last year. The latest 13-F filing with the Securities and Exchange Commission shows that Soros Fund Management increased its position in “puts” on the SPDR S&P 500 exchange-traded fund by a staggering amount in the second quarter from the first. The chairman of Soros Fund Management lifted his position to 11.3 million put options on the S&P 500 ETF (SPY), boosting the short position from 2.96 percent to 16.65 percent. The dollar value of the position soared to $2.2 billion from around $299 million. At 16.65 percent, that position is the biggest slice of the Soros firm’s portfolio.Many experts see such a put position as a wager that the price of the stock market (in this case the S&P 500) will tumble. However, some experts warn that such tactics might be part of some long-term trading strategy.

Given that the reported positions are as of June 30, Soros may have made changes since that time.

Friday, the S&P 500 pared earlier declines in the late afternoon, ending the day little changed at 1,955.06. It earlier fell as much as 0.7 percent. The S&P 500 rose 1.2 percent during the week and ended the week 1.7 percent below its all-time high of 1,987.98, reached July 24. However, Soros’ fund bought 182 new stocks in the second quarter. Soros also lifted positions in Apple and Facebook in a portfolio loaded up with stocks, “so he can’t possibly be all that gloomy,” MarketWatch reported. Soros nearly doubled his ownership in a U.S. gold-mining companies ETF and initiated new stakes in other gold producers, suggesting the big names in hedge funds continued to have confidence in the yellow metal, Reuters reports.

According to the Telegraph Soros has also increased his stake in Argentinian oil by purchasing 8.5 million shares in the state owned oil company YPF, this is in addition to shares he already holds in the company.

Combine these things with Soros, Warren Buffet and John Paulson dumping American stocks like their life depended on it and you have a very good reason to believe that any financial crash that’s coming, is coming soon.

If you have not prepared financially for your family then now is the time to do it. With a huge market correction heading our way, some experts say up to 90%, inflation is going to soar. Once inflation soars to 10% then the value of Treasury bonds falls to about half their value. At 20% inflation their value is practically zero. Interest rates will increase massively and real estate markets will collapse…all these things lead to a total collapse of the stock markets. Hyperinflation is a distinct and real possibility.

The time to step up your prepping is now. When a loaf of bread costs a wheelbarrow full of money it will be too late. Take a long, hard look at your personal preparations and plug any holes while you can because if Soros and his multi-billionaire cronies have their way, then the time you have left to do so is a lot shorter than you may have anticipated.

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Contributed by Chris Carrington of The Daily Sheeple.

Chris Carrington is a writer, researcher and lecturer with a background in science, technology and environmental studies. Chris is an editor for The Daily Sheeple. Wake the flock up!

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  • usmcmailman

    This demon needs to have a fatal stroke right away!

  • 2 Billion ain’t even pocket change anymore

    • dan

      an old joke went : a million here a million there and the first thing you know we’re talking REAL money
      (back when a billion was unimaginable)

  • Rebel Mel

    By the way things are accelerating we might have up to a year at most. At least I hope I have another year to prepare. I have prepared mentally and physically but there are a couple of big ticket items I want. A hand pump on the well is the most important.

    • Quitthevictimhood

      Agree on the hand pump….been really thinking about getting two of them…just in case.

    • americuh

      We bought a cheapie a couple of years ago, just so we would have one. Luckily we have a seep well, and not a deep one. Any one looking into a windmill set up?
      Oh, and as for Soros, I hope the SOB loses his arse.

  • Northwest_Raised

    Funny, funny, funny money! Must be nice to own those compooters, and know which sub-strings to input!

  • Seems the Perfect storm is fast approaching.
    And not to mention the study by the Defense Dept. that says 97% of ALL American’s will be dead after one year without power.
    That is only 3 out of every hundred people will survive.
    I found a great site that shows how you can make your own power and not have to worry about a Grid Down Terrorist attack OR a CME or an EMP. So no matter how you lose power you can still have and make your own power. See more at: http://www.iplantosurvive.info

  • sharonsj

    Most financial websites say the stock market is overvalued, but the Fed is propping it up. Since most people don’t own stock, we just have to worry with dealing with the aftermath. But if you have an IRA, a pension, etc., you better have a talk with the broker/company handling it, because you WILL be affected.

    • dan

      it’s pretty certain that social security will be a memory,too….I just bought twelve loggers cord of oak

  • ThomasThePaine

    Why isn’t he dangling from a rope?

    • disqus_3BrONUAJno

      Because his type never have.

  • ThomasThePaine

    What did you expect, with the Fed printing money like a drunk teenager with an inkjet?

    • disqus_3BrONUAJno

      The Fed has never printed money. They buy it from the Bureau of Engraving and sell it back at interest. Read the late Eustace Mullins and G. Edward Griffin.

      • ThomasThePaine

        Yes, yes, yes, they have their vassals printing it for them. . .

        • disqus_3BrONUAJno

          Vassals might make the plates, but the printers are serfs.

  • InfowarsMessenger

    They traded stocks the day before 911 took place too, and funny Bush is suppose to have that hearing on 911 this year.
    Wait until they cut the Food Stamps….oooh boy.

  • disqus_3BrONUAJno

    Walmart and McDonalds are always hiring people who lack intellectual tools.

  • James Emanon

    I have a 401k I am worried about. Now what? Should I move it into bonds? I can either move it between various investments within the 401k.. some of them are “bonds”. I thought bonds went UP when stocks go down?? This article makes it seem like both stocks and bonds will crash?

    • FalconMoose

      “This article makes it seem like both stocks and bonds will crash?”
      This is not the first I have heard of this.
      In addition, all FRN holdings are subject to collapse or confiscation by banks.
      Perhaps taking the hit on your 401K and buying silver/gold?

  • warisaracketbysmedleybutler

    Economic collapse and the collapse of the dollar are inevitable. Why do you think the police have been militarized? Why do you think the Department of Homeland Security was created as a domestic army bypassing Posse Comitatus? Why do you think the fascists that control this country are desperate to start world war 3 in the Middle East and against Syria, Iran, Russia, and China? This Zionist knows what the international banking cabal in Basel, Switzerland are doing to the world to pave the way for the full transformation in to the New World Order; a global military dictatorship and complete enslavement of humanity.

  • robertsgt40

    …and silver bullets