According to legendary investor George Soros, it’s not only the U.S. economy that’s in big trouble. Count Europe in as well. Ailish O’Hora of The Independent (IRL) wrote this morning:

Billionaire philanthropist George Soros said that while a recession in the US is inevitable, inflationary wage demands may mean Europe takes the same route.

With German trade unions asking for wage increases of about 7pc, Mr Soros said the European Central Bank, which views inflation as a major concern, will maintain high interest rates, which will hurt spending and keep the euro overvalued.

In an interview with French magazine ‘L’Express’, Mr Soros said he fears the worst of the US financial crisis is yet to come. Doubts over the solvency of financial institutions remain, hurting their ability to lend money to each other and to offer credit, he said.

Soros told the French publication:

The financial system is on the edge of a ‘rupture’ for the first time since the 1930s.

Source:

“Europe on the road to recession, says Soros”
Ailish O’Hora
The Independent (IRL), September 11, 2008

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