Wednesday, January 23, 2008

Dollar Credit Ends

Soros Sees End of Dollar-Backed Credit Expansion

Jan. 23 (Bloomberg) -- Billionaire investor George Soros said the post-World War II era of easy credit backed by the U.S. dollar will end as the nation's economy slips into an ``almost inevitable'' recession.

``The current crisis is not only the bust that follows the housing boom, it's basically the end of a 60-year period of continuing credit expansion based on the dollar as the reserve currency,'' Soros said in a debate today at the World Economic Forum in Davos, Switzerland. ``Now the rest of the world is increasingly unwilling to accumulate dollars.''

It's a credit crunch all right unless someone else wants to lend? But to lend what - imaginary debt?

A U.S. recession is all but certain as lenders and investors stop the flow of credit, while the global economy probably will avoid contraction, Soros, 77, said later in a Bloomberg Television interview.

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