How Soros Made A Billion Dollars And Almost Broke Britain

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 Comments

  • Jack Duff

    June 22, 2019

    This is why soros is trying to bring down America because we have laws against what soros has done to every country in the world except the US

    Reply
  • Omar Mahfouz

    June 22, 2019

    The only reason george soros is getting so much hate is that because he is originally not american.
    Thats the essence of investment, is to make money, regardless of the means.

    Reply
  • Ozymandias

    June 23, 2019

    A foolish man’s loss is smart man’s gain. Nothing hard here.

    Reply
  • My name is DICKSON我是迪迪

    June 24, 2019

    I am not so sure if i am correct. Correct me if i am wrong.
    During post war era, there is need for integration of economy for all european countries, and thus the eu. At first, all countries agree to ERM system that cannot allow exchange rate fluctuation to be too significant, but it stifle the ability of the country to control its own interest rate, growth, inflation and own future. PM Margaret insisted that participating in ERM system was not in best interest of UK but the later PM Major believed that this is the right way to go. While interest rate should be dropping to boost economic growth in times of economic recession in Uk, the UK government found it cannot do it as this will detached UK from ERM system. So the fact is everyone knows that Pound must depreciate one day and George Soros is just the person who caught the perfect timing on the depreciation of UK pound. Is my understanding correct?

    Reply
  • lee Caraher

    June 25, 2019

    George Soros and many others like him are trying to wipe out the white race with he’s open borders for white countries only .
    the Jews control the banks the media they easily pay off any politician ,Israel won’t sign the UN migration pact they want the worlds jews to return to Israel for there declining birth rates while promoting every white country to import the third world for there’s .

    Reply
  • Krisztofer Tokodi

    June 26, 2019

    SOROS TERV!

    Reply
  • Jimy Piha

    June 27, 2019

    Soros made his money in Budapest early 1940's
    Betraying his fellow Jewish neighbours and exposing them to the Gestapo.

    Then Soros would take huge part of the wealth confiscated from Hungarian Jews, which were sent to Nazi Death Camps.

    Reply
  • Brother Jake's Konservative Evolution

    June 28, 2019

    Behold, the Postmodern Puppet Master, the true enemy of the West.

    Reply
  • Hristo Hristoff

    June 29, 2019

    Easy, by being a jew :v

    Reply
  • jessie livermore

    June 29, 2019

    soros wasnt to blame back then just like nobody but the brits and their stupidity with brexit is now, dont they say they dont care well look at the value of the pound since 16, if brits dont care why should speculators?

    Reply
  • Leslie Tanner

    June 30, 2019

    Soros is a criminal.

    Reply
  • Aditya Rokade

    June 30, 2019

    The guy loves to cripple democracies yet he is a liberal hero

    Reply
  • Dark Knight

    July 1, 2019

    Well they got revenge as Soros lost over a billion betting against Trump. Justice served.

    Reply
  • A T

    July 2, 2019

    Trump 2020, the best chance at defeating further globalization !🇺🇸🇺🇸🇺🇸 the people are waking up across America Europe and the whole world

    Reply
  • Mark Rodriguez

    July 4, 2019

    He’s honestly just a smart ass dude

    Reply
  • Mike Simo

    July 5, 2019

    Why do Jews always have to play dirty for their own personal benefits. This is exactly why the whole world hates them. Please stop your unethical games, you destroy nations with your fucken games.

    Reply
  • Fritz Walter

    July 5, 2019

    This guy is literally earning a fortune by playing with the economy (and therefore lives) of countries. No idea what you guys think, but for me this is a form of terrorism. Instead of bombing a country, you can ruin their economy willingly, which ends up in chaos, unemployments or even war. Pretty fucked up.

    Reply
  • Geemonster

    July 6, 2019

    I cannot wait for him to die

    Reply
  • thegangstagentle

    July 6, 2019

    And GS was never sealed for this! Imagine this happening today!

    Reply
  • Raymond Spicer

    July 6, 2019

    YOU THINK HE COULDVE DID THIS WITHOUT INSIDE HELP FROM THE PARLIAMENT..EVERYTHING IS A SELECTED RIGGED GAME..

    Reply
  • Jarrod Yuki

    July 7, 2019

    soros needs to be arrested and his assets seized. his family should be put under surveillance and his organizations shut down.

    Reply
  • Jane20121985

    July 7, 2019

    soros really is a rotten man

    Reply
  • James Burke

    July 10, 2019

    A graphic in your video depicts the Union Jack Flag of the United Kingdom, over the territory of the Republic Of Ireland. This is an insult to the people of Ireland. Please change it.

    Reply
  • Anton Berglund

    July 12, 2019

    I hope Soros dies, an evil man he is.

    Reply
  • Vishnu Jeejo

    July 12, 2019

    I love this channel.. Pls publish videos more frequently

    Reply
  • Samudra Gogoi

    July 12, 2019

    0:01 music title?

    Reply
  • Myriri Myri

    July 13, 2019

    This was outright economic terrorism.
    And is exactly why Soros himself deserves to be executed or at least imprisoned for what little remains of his wretched life. On top of that the entirety of his assets should be seized and used to compensate his victims the British public.

    Reply
  • Kisembe Namusyule

    July 13, 2019

    Everyone is saying it was Majors fault, but the economy was already in a recession. An economy that Thatcher drove into the ground. I get their is a bias against Major and Soros, but it’s like you guys are omitting the fact that their economy was in a free fall since essentially the end of mass colonialism until the mid 2000’s

    Reply
  • Chas Peking

    July 14, 2019

    If Soros almost broke The Bank of England, it meant the Rothschilds wrote him a blank check.

    Reply
  • Fc king Sg

    July 14, 2019

    UK IS ONE OF FINANCIAL CENTER OF THE WORLD BUT SOROS ALMOST MAKE THEM BROKE…. THERE'S NO WAY I WILL INVEST IN UK LEST THE EVIL BRIT EMPIRE DID IT AGAIN..PLAYING WITH YOUR HEART WAHAHHAHA

    Reply
  • Scott Reed

    July 16, 2019

    One silver lining that came out of this crisis was when Germany ordered the Labour Party to have Britain join the new Euro, they had to dither. It set the stage for the only force in Europe who could challenge German rule to end up voting to leave. Compared to the war the cost was low.

    Reply
  • mark. c

    July 16, 2019

    Basically high level corruption against the working man

    Reply
  • Robin Östringer

    July 17, 2019

    He is more of a speculator than investor.

    Reply
  • Kayaba Heathcliff

    July 18, 2019

    Globalism politicians such as John Major and companies forced world economy into a more desparate. So Non-globalism politicians such as Donald.J.Trump and Boris Johnson have appeared in this age.

    Reply
  • steam fog

    July 18, 2019

    Τρία Μούτρα Late Night (ΟΛΟΓΡΑΦΩΣ ΓΙΑΝΝΟ, ΜΠΑΚΑ, ΤΣΑΓΚ) brought me here

    Reply
  • The Crown Group

    July 18, 2019

    LOVE SOROS! HE SHOULD HAVE BROKEN ENGLAND INTO PIECES

    Reply
  • Dhaasu

    July 19, 2019

    UK is sold to Saudi

    Reply
  • Garth Campbell

    July 19, 2019

    John Major a patsey

    Reply
  • G fue

    July 19, 2019

    We need a British dollar

    Reply
  • Marcus W

    July 21, 2019

    The uk never linked nor joined the euro

    Reply
  • Dee Zimmo

    July 23, 2019

    George Soros is a dangerous man. At least four of his financial foundations are behind the central American migrant crisis. I think he is trying to destabilize parts of the US; is civil war coming?

    Reply
  • Donald Sebolt

    July 24, 2019

    The world will be much better when that old bastard is gone

    Reply
  • Andrew Jackson

    July 25, 2019

    Why do conservatives feel like Jews such as Soros control the world? Perhaps they are antisemitic. Perhaps the Right Wingers are basing it on this kind of financial gamesmanship.

    Reply
  • Clem Alford

    July 25, 2019

    Soros is very clever evil.

    Reply
  • Arnulfo Laniba

    July 25, 2019

    Open border or borderless world is very OK at a time when racist consciousness ha been already replaced by We-Are-All-One-Family consciousness. But for others to freely enter the USA, not good at this time!

    Reply
  • Johnny Cash

    July 25, 2019

    Soros is attempting to destabilize the west for profit.

    Reply
  • Don Mega

    July 25, 2019

    Sold out many of the fellow jews to Hitler did ya Soros? That's how he made his early fortunes, as a Nazi collaborator.

    Reply
  • Mark Arnott

    July 27, 2019

    The blame is squarely on🤷‍♂️🏴‍☠️👍

    Reply
  • Johnny Bravo

    July 28, 2019

    Has anyone noticed the resemblance between Soros and jabba the hut from star wars…both slimey looking reptiles…

    Reply
  • Anna Hunt

    July 28, 2019

    UK   IDIOCY  TO    GIVE  THIS  IDIOT  THE   POWER AND  MOEY  TO  CREATE  A   COMMUNIST  STAE   ENEMY  OF THE  WESTERN  WORLD  AND  DEMOCRACY

    Reply
  • Dominik Kaňák

    July 29, 2019

    Queen deal

    Reply
  • Mikhel Brown

    July 29, 2019

    If Politicians are real patriots and perform their jobs well, people like George Soros won't have their way.

    Reply
  • Kornél Farkas

    July 29, 2019

    I don't like him because of his immigration politics , but i can say he was a fucking genius and shame what our dictator Orbán Viktor doing with him in the last 2 years .

    Reply
  • Tim Devlin

    July 29, 2019

    Soros is the anti Christ … and let’s not forget he helped the nazis hunt down and kill his own people …

    Reply
  • David miorgan

    July 30, 2019

    Soros could not have accomplished his typically Jewish theft without Jewish help from inside England! We now know john major and tony Blair were both on the Jewish payroll! The Rothschild's spread the rumours that England would lose and was losing the war against France even though he knew they were winning to buy up English stocks, then when England won, those stocks became priceless, making the Jew the wealthiest in England! Truly the international Jew is the worlds formost problem!

    Reply
  • Scott Herford

    August 2, 2019

    Great video. It answered many questions I had about Soros in the early 1990s.

    Reply
  • Monika Dietz

    August 2, 2019

    2025 hat Deutschland noch 25 000000 EW.
    Gel🤣🤣😁😂🤣😋

    Reply
  • doczg88

    August 3, 2019

    He is Gyurgy Schwartz. He made up name "George Soros" to easily operate in English speaking countries.

    Reply
  • paulgilpin

    August 4, 2019

    there has got to be a tremendous power behind soros. he doesn't piss off people. he pisses off countries. the power behind his throne is on full display daily.
    if not, this asswipe would have achieved room temperature decades ago.

    Reply
  • Tejendra singh Tanwar

    August 5, 2019

    He is making more money flooding the immigrants in Europe

    Reply
  • brian preval

    August 6, 2019

    John major is abloody traiter!!

    Reply
  • D C

    August 6, 2019

    As teenager I thought John Major was a joke when I first saw him, I couldn't believe that's what he was actually like what a utterly useless twat.

    Reply
  • Cristo Mario

    August 8, 2019

    if you create chaos and always place your bet on both sides you will always be successful and just as corrupt as the evil soros!

    Reply
  • RAJENKUMAR PATEL

    August 9, 2019

    Britain loot many countries around the world and now it time to Britain.

    Reply
  • seljadin prdolesku

    August 9, 2019

    He is one of (((them))) that explains how he goes unpunished

    Reply
  • Fred

    August 10, 2019

    This video blames Soros. But I blame the UK government because what they did enabled Soros to take the money. To me it was predictable and all Soros did was predict that when it comes to a decision between the City of London and the Country, the government and the Bank of England will always support the City. Soros saw that huge billboard flashing, Come and get it! Free money!

    Reply
  • Ada Johnson

    August 13, 2019

    Being older and still watching" people will always choose the man with the Stupidest plan.

    Reply
  • Liberty Bell1776

    August 13, 2019

    George Soros is an economic Terrorist!

    Reply
  • Zachary Rose

    August 14, 2019

    The Jews broke Britain a long time ago.

    Reply
  • Mary Nelson

    August 14, 2019

    Soros did some dirty things in Russa

    Reply
  • Bereket Alemu rago

    August 15, 2019

    learning how the stock market works is my interest.

    Reply
  • Bereket Alemu rago

    August 15, 2019

    economy0zero.

    Reply
  • Hartono Kafrawi

    August 15, 2019

    Indonesia been suffer on 1998….

    Reply
  • Ashley Victoria

    August 15, 2019

    Can't take this channel seriously anymore. The titles and videos always insinuate conspiracy theories of “them/they”. “They” who???

    Reply
  • Jon Grant

    August 18, 2019

    It's called short selling.
    Get your house in order, or someone will come burn it down.

    Reply
  • Anthony Cox

    August 18, 2019

    Up The Iron Lady

    Reply
  • Mickael Ruis

    August 19, 2019

    soros plays bitcoins IRL

    Reply
  • andalargesoda q

    August 20, 2019

    1:27 wtf is that map? :DD where is hungary slovakia croatia romania and what is this new superstate?

    Reply
  • Pat W

    August 21, 2019

    I as a business major haven’t heard but now I’m aware

    Reply
  • Ella Larkin

    August 21, 2019

    Soros, Jacob Rothschild, the 'British royal family', the Clintons, the Rockefellers and all the other demonic paedophiles will soon die, and they will burn in Hell for all eternity for what they have done to the people of this world.

    Reply
  • I B S A H

    August 21, 2019

    He is a jew. George soros is not his real name.

    Reply
  • Eliezer Israel

    August 22, 2019

    Jewish numerology wizardry at its finest great job

    Reply
  • Dominus Nox

    August 23, 2019

    He's a one-man plague upon humanity.

    Reply
  • John Hewer

    August 25, 2019

    As usual financiers ripped the guts out of ordinary people, lots of people lost their jobs yet you try to say Soros did the UK a favour. I guess you're in favour of what they did in2008?

    Reply
  • DanceGeekRob

    August 25, 2019

    The background music is very distracting….

    Reply
  • FREEDOM

    August 26, 2019

    Break the bank of England someone should break his ugly face

    Reply
  • FREEDOM

    August 26, 2019

    Sorros looks like a desperate PIG

    Reply
  • FREEDOM

    August 26, 2019

    He let sorros make him raise the interest rate wow he should have been hung

    Reply
  • weaton25

    August 26, 2019

    Funny how it seems most of these greedy money people are ( J**ish ) enough said I think

    Reply
  • Abdi Fupi

    August 26, 2019

    Be careful guys you all will be label anti Semite . Don't dare speak of him and his atrocities.

    Reply
  • Ricky Bobby

    August 28, 2019

    LIBERUUUUUUUUUUUUUUUUUUUUUULS

    Reply
  • Don farlan

    August 28, 2019

    Government's Dont necessarily do better with the bucks than privately funded internationals do so just cause hes not elected by a body or board members

    Reply
  • Don farlan

    August 28, 2019

    People are jealous of moguls why not money is healing

    Reply
  • Arnd Brack

    August 30, 2019

    The amount of conspiracy- and hatecomments is just… too damn high!!

    Reply
  • The Marauder

    August 30, 2019

    The only thing he and his family deserve are bullets to the head. He invested $18 billion into his open society, had 42 meetings with the EU Commission and published a book that had 226 "friends" names listed who belong to multiple governments across the world. He is a cancer that needs to be eliminated.

    Reply
  • Gwinyai Dhliwayo

    August 31, 2019

    How Was This Allowed To Happen1?$

    Reply
  • Genius Goblin

    August 31, 2019

    When George Soros dies the birds will start singing and the sun will shine.

    Reply
  • SalTAE gukkies

    September 1, 2019

    when will this guy die so that the world can become a better place???

    Reply
  • Lance Rexington

    September 1, 2019

    This communist Jew is out to bring down democracy.

    Reply
  • Thomas L. Hutcheson

    September 2, 2019

    Soros almost single-handedly kept UK out of the European Currency System, precursor of the EURO which has been such a a disaster for Europe. Everyone in the UK should light a little candle every night in front of his photo.

    Reply

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