George Soros, billionaire and founder of Soros Fund Management LLC, pauses while speaking at an event on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, Jan. 23, 2020.
Simon Dawson | Bloomberg | Getty Images
Liberal billionaire George Soros said Thursday that the U.S. economy could be headed for calamity as a result of President Donald Trump’s efforts to juice American business and stock prices ahead of the 2020 election.
“Trump’s economic team has managed to overheat an already buoyant economy,” Soros warned his dinner guests at the World Economic Forum in Davos, Switzerland.
“The stock market, already celebrating Trump’s military success, is breaking out to reach new heights,” he continued. “But an overheated economy can’t be kept boiling for too long. If all this had happened closer to the elections, it would have assured his reelection.”
“His problem is that the elections are still 10 months away, and in a revolutionary situation, that is a lifetime,” Soros said.
Soros, the 89-year-old Democratic megadonor whose net worth peaks at over $8 billion, delivered the remarks at a dinner at the Forum, an annual conference set amid the Swiss Alps and known for featuring elite business and political leaders.
The longtime investor’s comment came on the heels of fresh record highs in the U.S. stock market and amid the longest bull market in American history. Many economists accredit the surge to the Trump administration’s policies including larger corporate profits due to the 2017 Tax Cuts and Jobs Act and renegotiated trade agreements.
While the administration’s tax cuts lowered the rate corporations pay in income taxes to 21%, the White House hasn’t shirked away from approving big-ticket fiscal budgets or increases in military spending.
Meanwhile, improvements to U.S.-China trade relations provided a boost toward the end of last year. Both sides agreed to a “phase one” trade deal in which China promised to increase its purchases of U.S. manufacturing, energy and agricultural goods and services by at least $200 billion over two years.
Such policies helped lead the S&P 500 hit an all-time high of 3,337.77 on Wednesday after rallying more than 28% in 2019.
On Wall Street, Soros is perhaps best known for his trading prowess and $1 billion bet against sterling that saw him and then-Soros manager Stanley Druckenmiller “break the Bank of England” on Black Wednesday in 1992.
A string of lucrative annual gains at his Soros Fund Management through the 1990s ended in 2000, when the firm’s Quantum fund swooned, following a host of technology and biotech stocks downward. Though the investor has for years said he’s “retired,” Soros has been known to occasionally make active trading bets and helped his firm through the financial crisis.
He also took the opportunity Thursday to slam President Donald Trump and China.
Soros said Chinese President Xi Jinping is “trying to exploit Trump’s weaknesses.” He also accused Xi of using “artificial intelligence to have total control of his people.”
He added that he thinks Trump “is a con man and a narcissist, who wants the world to revolve around him.”
“When his fantasy of becoming president became a reality,” that narcissism dialed up, Soros said. “This has turned his narcissism into a malignant disease.”
— Brian Schwartz reported from Davos, Switzerland. Thomas Franck reported from Englewood Cliffs, New Jersey.