- (Reuters) - International financier George Soros says
the United States is in recession and will drag the world down with it
before recovering in 2002.
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- "We are in a recession and we know that the fourth
quarter is going to be awful," the Hungarian-born hedge fund expert
said of the U.S. economy on Sunday.
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- "We hope that because of the counter-cyclical
measures
now taken that we will have a reasonable recovery, at the latest in the
second quarter of next year."
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- The United States "led the world down, it is likely
to lead it up," he told BBC Television.
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- But because of highly-inflated stock market and asset
prices in recent years, Soros said the strength of any economic rebound
was hard to gauge.
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- "There is some question in my mind about the
strength
of the recovery. We are going to climb out of the hole but how much further
we go on the recovery track, that remains very much an open question
because
we have had a big asset boom, which is likely to take some time to
dissipate,"
he said.
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- The billionaire investor praised the U.S. Federal Reserve
for "moving aggressively" to cut interest rates as consumer
confidence
plummeted after the September 11 hijacked plane attacks on New York and
Washington.
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- But he had harsh words for the European Central Bank,
which has been much slower to ease monetary policy.
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- "The European Central Bank is firmly
backward-looking
and is not moving until inflation has come down. There is room to criticise
the policy of the European Central Bank."
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- The ECB, Soros said, must take economic activity into
account, not just price stability.
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