George Soros on this CRISIS: It has gone beyond my wildest imagination."

INTERVIEW WITH GEORGE SOROS

Q: Mr. Soros, in spite of massive interventions by governments and federal banks the financial crisis is getting worse. The stock markets are in free fall, millions of people could lose their jobs. More and more companies are in trouble, from General Motors in Detroit to BASF in Ludwigshafen. Have you ever seen anything like it?

A: Soros: " Never. I find the present situation dramatic and overwhelming. In my latest book “The New Paradigm for Financial Markets: The Credit Crisis of 2008” I predicted the worst financial crisis since the 1930s. But to tell you the truth: I did not actually anticipate that it would get as bad as it did. It has gone beyond my wildest imagination."

The economy fell off the cliff, you begin to see mangled bodies lying at the bottom.

Q: Was it a policy mistake to let Lehman Brothers go bankrupt?

A: Soros: " It was a fatal mistake. I would have never expected that the authorities let such a big investment bank go. "

Q: Will there be more victims?

A: Soros: Possibly. CitiBank, one of the world’s largest banks, is currently at the center of attention (eds. note: The $300 billion US government plan to stabilize CitiBank had not been approved by the time of this interview). There are some other bodies lined up for potential trouble. The situation is very similar to the 1930s -- but it is going to unfold differently.

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We have learned not to allow the financial market to collapse.
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We will spend all the money in the world to prevent that from happening.

Q: What are your expectations for the next Secretary of the Treasury?

A: Soros: I think we need a large stimulus package which will provide funds for state and local government to maintain their budgets -- because they are not allowed by the constitution to run a deficit. For such a program to be successful,
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the federal government would need to provide hundreds of billions of dollars.
In addition, another infrastructure program is necessary. In total, the cost
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would be in the 300 to 600 billion dollar range:
Q:: Could Obama be the first "post-American president" -- because his country loses economic force and "soft power"?

Soros: If Obama is wise, he will find common ground with China to solve this crisis. If he wants to do it alone, we will go into a worldwide depression because America is not in a position by itself to clean up the mess it created.
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