George Soros Makes a Cool Billion

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George Soros has long been considered one of the best speculators in the world when it comes to global currencies. He has made billions of dollars by being able to accurately analyze various markets and make moves with large amounts of money when George Soros thinks there is going to be a fluctuation in a currency. He came to the fore front in terms of market prediction in 1992, when he bet that the UK was going to have to devalue their currency. ValueWalk has recently put out an article that depicts his strategy during this time frame, as he knew that the UK was going to have to devalue their currency, putting his own hedge fund on the line.

1992 was an interesting time in terms of monetary systems on during the early 1990’s, and Britain wound up trying to do some things that put them in hot water. They were a part of the Exchange Rate Mechanism, or ERM, which basically was a system to handle the many monetary systems that were present in Europe. When you have countries that are in close proximity that are exchanging currency frequently, this type of exchange rate system is essential in order to ensure that the exchange rate is fair. The UK had very high inflation rates during the time and took action to try to boost the pound. They basically raised their interest rates in an attempt to attract people in Europe to invest in the pound. George Soros was one of the people that recognized that this was not going to work and decided that he was going to short the currency. The UK eventually had no other choice but to withdraw from the ERM, as they were spending way too much money trying to artificially boost the pound. 

The end result was that Soros accurately guessed that the pound was going to drop in relation to other currencies and put his chips in a position to increase in value. He made over a billion dollars in this move alone on, which is why so many people took notice and still to this day consider him to be without a doubt one of the best speculators on the planet. After Soros did this and the UK was forced to devalue their currency, the hedge fund that Soros possessed increased from fifteen billion to twenty two billion dollars over a few months, although it jumped drastically on the first day. Since this time, George Soros has continued to accurately forecast what is going to happen in various markets and has increased his net worth significantly since the early nineties, but this was one of the biggest money makers over his career thus far.