The New York Times

Wednesday, January 3, 2001

Soros Sees a Hard Landing for the U.S.

By REUTERS

SANTIAGO, Chile, Jan. 2 - George Soros, the billionaire financier, told a Chilean newspaper that the United States economy was in for a "bouncy and hard" landing, but his main concern was for spillover turmoil in emerging markets.

In an interview with Chile's El Mercurio newspaper, Mr. Soros also said he believed that a global crisis was inevitable even though he expected the Federal Reserve to lower key interest rates aggressively early this year.

"I believe that it will be bouncy and hard," the newspaper quoted him as saying. "A hard landing means a slowdown and could eventually turn into a recession or in low growth for a couple of quarters. We are in a fairly classic slowdown cycle in the United States.

"But I am much more worried about the consequences on the edge of the system because this edge has been weakened because of the 1997-1998 crisis, and I believe will have more serious repercussions in distant regions, such as Southeast Asia."

Mr. Soros said the problem with the looming crisis was inadequate capital flows from industrial nations to emerging nations.