How Soros Made A Billion Dollars And Almost Broke Britain


George Soros: a man shrouded in political
controversy and yet one of the most successful investors of all time. While many today are familiar with his political
endeavors, there is a much more interesting story that has in comparison avoided the public
spotlight. In this video, we’re going back to the decade
before the euro, where the wild west of European currencies allowed George Soros to almost
break the Bank of England and to make a billion dollars in the process. This video is brought to you by Skillshare. Watch my classes on how the stock market works
for free by registering with the link in the description. In the aftermath of the Second World War,
the nations of Europe decided that the only way to prevent the same sort of destruction
from ever happening again was by banding together and forming a closely integrated union. The idea was that if the European economies
all depended on each other they’d be unlikely to start another war. The ultimate expression of this integration
is, of course, the Euro, but before the single currency was introduced in 1999, Europe had
another system to manage its currencies. Back in 1979, the countries of the European
Community weren’t ready to give up their national currencies just yet, but they did
agree to link them all together at a fixed rate, effectively removing the exchange rate
fluctuations you usually have to consider when doing business across borders. This new system, known as the Exchange Rate
Mechanism or ERM, sounded good on paper and did make things easier for a lot of people,
but it also made the national banks of these countries very vulnerable. You see, people buy currencies every day in
vast volumes to fund imports or exports and these transactions have a significant effect
on the actual exchange rate you can get from the market. So once a country became a part of the ERM,
it had to constantly monitor the markets and intervene if their exchange rate started to
deviate too much. If too many people were buying, the national
bank would start to sell and if everyone was selling, it would go in to buy. Without going into too much detail, the ERM
was flawed because every country is unique: it has to constantly balance interest rates,
inflation and economic growth, which it cannot do if its currency is artificially chained
to others. Margaret Thatcher, the Prime Minister of the
UK at the time, understood this very well, which is why she opposed it and why Britain
wasn’t a part of the ERM when it first began. However, as the British economy worsened towards
the end of the 1980s, Thatcher’s eurosceptics lost ground to the more pro-European members
of the Conservative Party. By October 1990 Thatcher’s power had diminished
so much that Britain joined the ERM despite her opposition, thanks to the political power
of John Major, the Chancellor of the Exchequer at the time. Less than a month later, Thatcher had resigned
and Major was selected as prime minister, hailing the ERM as his victory. All my adult live I’ve seen British governments
driven off their virtuous pursuit of low inflation by market problems or political problems. I was under no illusions when I took Britain
into the Exchange Rate Mechanism. I said at the time that membership was no
soft option. The soft option, the devaluous option, the
inflationary option, in my judgement that would be a betrayal of our future at this
moment and I tell you categorically: that is not your government’s policy. But while November 1990 might have been the
start of a very successful political career for John Major, it was just the beginning
of Britain’s economic problems. You see, when the UK joined the ERM, it was
already in a recession. Now, when an economy is in a recession the
central bank, in this case the Bank of England wants to cut interest rates to prop things
up, but because of the ERM it could no longer do that. The British pound was already a very weak
currency, with the UK’s inflation rate being three times higher than Germany’s. If the Bank of England cut rates, it would
help the British economy, but it would devalue the pound so much that Britain would have
to leave the ERM, which of course John Major would never allow. And so between 1990 and 1992 the British economy
suffered. Of course, just keeping interest rates high
wasn’t enough to maintain the pound’s value and so throughout these two years the
Bank of England would frequently go to the market and start buying up pounds by the millions,
using up its foreign exchange reserves in the process. Even that didn’t really help though, since
the pound continuously weakened during this time, just barely within the limits of the
ERM. Pretty much every currency speculator understood
that eventually the British pound would have to devalue, but the billion-dollar question
was, when would that happen and the man with the answer was George Soros. He had been running his hedge fund since the
1970s and his specialty was predicting and sometimes forcing the catalysts to big market
events. He knew that almost everyone was ready to
bet against the British pound if only there was some sort of bad news that could trigger
a stampede big enough to overwhelm the Bank of England. Starting in August 1992, Soros and his fund
began building a position against the pound and here’s how he did it. He’d go to a big bank or another hedge fund
and he’d borrow pounds from them, with the promise of repaying them with some interest
on top. Then, he’d go to the foreign exchange market
and he’d sell those borrowed pounds to buy G
You can expect my next video two weeks from now, and until then: stay smart.erman marks
instead, the idea being that when the exchange rate drops he’d be able to buy back those
pounds cheaper, earning the difference as profit. By the end of August Soros had slowly built
up a position equivalent to $1.5 billion dollars against the pound, but the exchange rate had
barely moved. He needed some sort of news to really start
increasing his position and luckily for him, on September 16th the President of the Bundesbank
held a seemingly innocent interview that Soros could nevertheless use. The Bundesbank President said that he “doesn’t
rule out that some currencies might come under pressure,” which in and of itself is a very
vague and unconvincing statement, but Soros decided that it was good enough for him. That same night, while Europe was fast asleep,
Soros called up any international bank or company or really anyone that had British
pounds and he tried to borrow them with great success. By the time the British woke up, Soros had
sold the equivalent of $10 billion worth of pounds on the open market. Unsurprisingly, the Bank of England was in
complete chaos. After an emergency meeting with John Major,
the Chancellor of the Exchequer began a desperate fight. At 8:40 AM on September 17th, he authorized
the purchase of one billion pounds from the market to no effect. By 9 AM he had purchased another two billion
pounds, at which point he dialed John Major again to request permission to increase the
interest rate, which of course because Britain was in a recession would be devastating to
the economy. Initially, John Major refused because he thought
it would be political suicide, but as Soros and the global currency market continued selling
pounds, by 11 AM Major conceded and Britain made a surprise announcement that it was increasing
its interest rates by two percent, which is a very big increase. By the end of the day, Britain had purchased
27 billion pounds and had increased its interest rate a second time to 15%, but just Soros
alone had sold about half as many pounds and by that point the entire world was following
suit. At 7:30 PM the British government accepted
defeat with the following news conference. A unique day in London’s financial markets
ended with the Chancellor announcing that the pound was being suspended from the ERM
and that the second of two dramatic interest rate rises during the day was after all cancelled. Today has been an extremely difficult and
turbulent day. Massive speculative flows continued to disrupt
the functioning of the Exchange Rate Mechanism. As chairman of the Council of European Finance
Ministers I have called a meeting of the Monetary Committee in Brussels urgently tonight to
consider how stability can be restored to the foreign exchange markets. In the meantime, the government has concluded
that Britain’s best interests are served by suspending our membership of the Exchange
Rate Mechanism. Over the next few days, as the foreign exchange
markets were left to their own devices, the British pound fell by 15% against the German
mark and by 25% against the US dollar. Soros and his fund pocketed a nice $1 billion
from their trade, while the estimated cost to the British taxpayer was over 3 billion
pounds. Here’s the funny thing though: in the aftermath
of Black Wednesday, as they called it, the Bank of England was once again free to control
the British pound, which it did and over the next few years it steadily cut interest rates
and actually restored the British economy to high levels of growth. By 1997 the British pound was actually more
valuable than it had been during the ERM and the UK was on its way to 16 consecutive years
of economic expansion, so much so, that some people actually call that day White Wednesday. So in the end, Soros might’ve actually done
the British a favor, even though he pocketed about $15 for every man, woman and child in
Great Britain. Now, if you enjoy learning about financial
markets then you’ll be happy to know that I have two animated courses on Skillshare
about how the stock market works. The first one is a 20-minute general introduction,
whereas the second one is a 40-minute exploration that dives deeper into how stocks actually
work and how you can value them. You can watch both my classes right now for
free if you’re one of the first 500 people to sign up for Skillshare using the link in
the description. I’d appreciate it a lot if you watch my
courses and even more so if you share it around with your friends. Of course, you’re also welcome to share
this video and I really hope you enjoyed.

100 thoughts on “How Soros Made A Billion Dollars And Almost Broke Britain

  1. Thanks for watching! Enjoyed? Don't forget to like & share!
    ✪ Get 2 months of Skillshare (for free!) 👉https://gobc.tv/skillshare

  2. One greed man , People like soros and many others like him who make money out other people s misery should t be allowed into things like that ,and everyone else here commenting on Tacher and Major , but no one see who’s did all the trouble

  3. Current forex trader/.. Brexit causing huge volatility . pounds crashed once last month if you are with me you already know. they will rize 3% then they will fall again and I will start shorting again in 3 weeks . after that they will increase till mid 2020 then huge mf crash 2021 they will once agin go back up,. if you want to know how I know reply… lol im drunk af I should not give away my trade sekrts

  4. the thumbnail is very misleading . he did not rob anyone . he identified a market opportunity and exploited it . isnt that what capitalism is ? the thumbnail makes me want to respect this channel less as this shows cheap marketing trick for clicks

  5. Who cares if the British let this old geezer rob them blind that`s there problem there letting a Dracon rule them as queen so why not.

  6. Hmm… So George made a metaphorical but serious micro-tare in the muscle of England's economy…. ?
    Whatever. I'm high as phuk rite now.

  7. Soros banned now in Philippines your not welcome mr devil soros you save the drug protector delima you save the drug queen

  8. We lost our home, The marriage broke down, My sons lost an educational advantage which affects them to this day
    This happened to hundreds of thousands of people in Britain but millions across the world
    The man is a monster, cares nothing for humanity, whatever the colour, whatever the ages, whatever their status, wherever they come from.
    His open border plans are for him to grab more money from the world poor.
    He is a disgrace to the human race.
    I bet his children follow in his greed.

  9. PER COLPA DI QUESTA SPECIE DI UOMO CHE NEL 1992 FECE SVALUTARE LA LIRA DEL 30% DACCORDO CON POLITICI ITALIANI CORROTTI GLI HANNO SVENDUTO IL FIOR FIORE DELL'ITALIA. SEMPRE NEL 1992 LO FECE ANCHE IN INGHILTERRA FECE SVALUTARE LA STERLINA DEL 30% IN RUSSIA HA UN MANDATO DI CATTURA INTERNAZIONALE IN THAILANDIA LA PENA DI MORTE.ALTRO CHE BRAVO QUESTO É UN DELINQUENTE CON LA CRAVATTA

  10. These comments saying "Soros is evil" are so wrong, if he didn't exploit incompetence someone else would have. That's how the markets work little ones… GGWP Soros

  11. Looking back Britain never should have joined the EU. As a nation we have relationships with countries that are the envy of the world. As an economy and a market we are incredibly powerful. Why would countries increase tariffs, that would be political and economic suicide. Our relationship with the US had worked in that way for a while now, and it's a resounding success. Why couldn't we have the same relationship with the EU. The only downside is our reduced presence internationally in terms of defence but honestly other than the safety of UK nationals, who honestly care about the middle east. Also we still have the commonwealth. Yes it isn't an empire but they are still major trading partners that the UK has a unique relationship with. Overall I don't think Brexit will be as bad as liberals say. It will obviously cause some economic damage, for maybe 5 years, but that will help with the inflated spending in our country. The NHS and social welfare needs an overhaul, in order for it to function in the modern era. Britain will rise again as a dominant player. We will control how we trade. America and the EU won’t be able to push us around, they will be forced to cooperate.

    see how i didn't mention immigration, as that not relevant. yes there are some very racist breixteers. but others aren't

  12. What a piece of garbage, Literally robbing the British government and got away with it.. tells us alot about his character..

  13. Great, now make a video of how Soros, speculated on HK dollar, betting, erroneously, that local and Chinese authorities were too preocuppied with social unrests and ended up losing his shirt…. Has anyone herd from Soros lately?

  14. George SOROS is a gift to ALL who who peruse ECONOMIC AND SOCIAL JUSTICE. He uses his money for the good of humanity.
    Cheers from Australia MATE. COOOEE.

  15. What a tragic world we live in when an old man like this has so much money and doesn’t spend it on alternative energy projects or water purification, but on political subversion.

  16. I don't get why there is so much hate for Soros? He saw a weakness in the way the government was doing its business and took advantage of it, isn't that how free market works?

  17. We have a criminal, corrupt, immoral and deceitful monetary system.

    There is overwhelming evidence we've been lied to and deceived for millennia on a grand scale about almost everything by a group of greedy, dysfunctional, entitled,  "elites," 13 families, council of 300 et al.

    A huge tapestry of deceit, greed & secrecy, to control and keep the true nature of humanity from ourselves, our history, true origin, destroy our pineal gland and keep us tied to debt, cause constant wars, confusion and tension for them to get more wealth, control and power over us until we and our descendants are eternally enslaved in this NWO Luciferian web.

    From the Annunaki, Adamu, even our redacted, edited and corrupt bible, nibiru, monoatomic gold, religion, wars, Lincoln, Jackson, Garfield, JFK,  the federal reserve, USS Liberty,  giant skeletons, abduction/disappearances, pedophilia, PNAC, COFR, Tri Lat Comm to 911 and now the war on "terror." Our fed is the terrorist! Let's stop these ridiculous, insane, elite created wars that are enemies of the fed not the US!

    Let's KRUSH da kabal!

  18. This is also how John Major ruined the UK…he was originally strongly advised NOT to put the pound on the exchange rate.

  19. I'll tell you how because they have a bunch of liberal dumbasses running their country maybe not so much now but they did have just like we had but we don't know and just like Canada has in France and actually every globalist country Germany

  20. No doubt Britain and all British are nationalistic, dictatorial, conservatives who deserve to be punished by a liberal messiah like Soros…. and give up few billions too as donation to the liberal cause

  21. His demonic strategy is to manipulate and incite division to collapse economies for his contrarian investment strategy. The most evil man in the world. His funding of opposition efforts such as leftists, migrant caravans, ANTIFA, etc. is the way he accomplishes his goals. His investments in gold clearly demonstrate this intention. Funding subversives is criminal and he should be indicted. He cares nothing about the people he hurts or lives he destroys. His unbridled greed is abnormal. Haul him into court and prosecute him as an enemy of the people.

  22. It was George Soros's thanks to the British people for helping defeat the Nazi's. He stole the money not from the UK but the British working people whose parents and Grand parents had fought and died in the last war so he could come here in 1947 and learn economics.

  23. this man caused thousands people lost their life during riot in 1997 south east asia currency crash.he is mass murderer and get away with it.

  24. . They didn't actually break it, but they forced the British government to pull it from the European Exchange Rate Mechanism (ERM). Joining the ERM was part of Britain's effort to help the unification of the European economies. However, in the imperialistic style of old, she had tried to stack the deck.

    Although it stood apart from European currencies, the British pound had shadowed the German mark in the period leading up to the 1990s. Unfortunately, the desire to "keep up with the Joneses" left Britain with low interest rates and high inflation. Britain entered the ERM with the express desire to keep its currency above 2.7 marks to the pound. This was fundamentally unsound because Britain's inflation rate was many times that of Germany's.

    England broke itself the market responded.

  25. Alguém pode dizer pra o George Soros bilionário que eu sou só preciso de 200 mil reais pra ser a pessoa mais feliz do mundo

  26. Jus de fausse îles a été la découverte .. comment tuer l' homme part ce besoin, retirer le jus du sol pour y introduire de l'eaux a la place et du coup les source s'épuise et plus RYAN pour le noyau central en fusion, plus RYAN pour le nourrir, il vont pas dans l' espace , non jamais été sur la Lune, pas fini, il en mettre dans nos cigarette, goudron je parle, oxyde de carbon par l'échappement de la voiture ou des motor a gasoline, et le dériver de pétrole, pour la Vaseline et aussi préparation H , Osti, qui font entré le trous du Q a l'intérieur, asphalte ou pavé a émanation du centre de la Terre et de plus en plus mince et doive refaire ! Dynastie du POUVOIR nous tuer et même notre TERRE-MÈRE avec nos main avec notre consentement a tuer Dallas jus te pour J.R. E.T. , nous sommes tous souiller d'avoir permis celas ! RÉPARER MAINTENANT ., 1C1 CoCotte 911 , sauvé soldat RYAN et son équipe, ils en valent la PEINE. L' énergie libre existe ., M O I , j' ai voter que trois fois dans ma vie, 3 x de Trop & A P P E L E.T. CoCotte 911 !! AMAZONIA SAUVÉ & LAISSER SERPENT BRÛLER ( Australie Rapt-or Control ) Le Fils de Marie Reine des m1SS1on … 333

  27. One reporter asked Soros 'how do you feel about taking the UK s money? Soros replied 'it's not their money, it's MINE!'

  28. People are calling soros a terrible person. But an idiot in the government gave him an opportunity to bet against the economy and he seized it. If it wasn’t him it would’ve been the other thousands who were betting against the economy Soros was just the whale.

  29. Who knew? Soros actually did us a favour!!! So, that's how we never changed to the Euro! Yipee! Thank you, Soros – Definately helped with BREXIT, from way back then. Yay! 🙂

  30. Short term volatility is greatest at turning points and diminishes as a trend becomes established. By the time all the participants have adjusted, the rules of the game will change again.

    George Soros

  31. once soros dies, his descendants will be no match for the conservative politicians and billionaires. be patient, once he dies the globalist movement will start to foil and break off. and i predict his death within the next decade at most.

  32. This is the devil trying to cause chaos, look how he's been importing south America into the USA, look at the race war he's trying to start, etc. He's evil. God bless the world🇺🇸🇺🇸🇺🇸

  33. Next please do one on: How Great Britain Robbed, Raped and Pillaged India to create its fortune. After that you can do one on How Great Britain Robbed, Raped and Pillaged Africa to create its fortune.

  34. John Major used to say of his lack of education "so much has been spoken about so little" so true he was not clever enough to be PM of the UK he did a lot of damage to our country in his time as one of the useless PM this Country has ever had.

  35. He also made off like a bandit after the mortgage crisis in he U.S. in 08 by getting info no other person other than politicians could get. How? He got it from Senators. Inside info.

  36. His first job was taking the property of persons put in Nazi camps and he was quite excited bring in charge and said he has no regrets if he wasn’t doing it someone else would. He should be banished from all civilized society put in Gitmo

  37. Satan in the flesh……..and the Gods are now standing up to fight….and HE already choose Trump, Farage, more to come…to fight the fight.
    USA will win the fight on 3 november….to fight the European Union takes longer but eventually it WILL go

  38. This is how Brexit started. George Soros resulted in us leaving the EU. The UK should have joined the Euro. But we never did. The Opt out Major negotiated was a serious mistake, it gave governments an excuse to put off joining the Euro. Therefore we were seen as reluctant members and now we've left and I want back in. It breaks my heart to know that not only we've left Europe but we're being lead by a total moron who's only trying to appeal to Nigel Farage so he's decided to decimate the economy in order to say that we've taken back control we never lost. If I can I want to start trying to get back in soon. When Boris destroys the economy and the pounf it may provoke our rejoin efforts.

  39. The ERM had warned the British Government that the Pound was overvalued and had suggested to devalue the Pound to reflect the changed economic conditions.
    But the UK Government declined, because the Chancellor who devalues the Pound gets fired!
    Then Soros pushed the market over.

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