Hedge fund manager George Soros famously bet against the UK pound. Hedge funds were not yet well known. In a nutshell, Soros believed that the British Pound was overvalued and was headed for a devaluation. So, he borrowed over ten billion Pounds in a ‘Go for the jugular’ move. He then immediately converted the Pounds into German Marks. When the markets learned about Soros’ actions, other traders followed suit. This run on the Pound triggered a devaluation. Soros then used his Marks to buy back the now devalued Pounds and pocketed $1.4 billion profit. All in one day.
Soros would go on to repeat this money market manipulation across the world for decades. These funds were used to finance Bill & Hillary Clinton, The Clinton Foundation, The Clinton Global Initiative, Barack Obama, his takeover of the U.S. Democratic Party and his Open Society Foundations globalist “new world order” political agenda. With his dedication to the deep state and new world order agenda since his ‘miracle run’ in the market, it would not be surprising if he had some deep state help and sold his soul to the devil, if he hadn’t already. Whether lucky or helped, the website Price-economics, has an expert account, in summary, of how Soros broke the pound:
“In 1992, George Soros brought the Bank of England to its knees. In the process, he pocketed over a billion dollars. Making a billion dollars is by all accounts pretty cool. But demolishing the monetary system of Great Britain in a single day with an elegantly constructed bet against its currency? That’s the stuff of legends.
George Soros, at the time, was 62 years old and led the Quantum Fund, a hedge fund he founded in 1970 that bet on macroeconomic trends. Soros was already a very rich guy, but he wasn’t iconically rich, or the public figure he is today. Since August, Soros and his Quantum Fund had been building a $1.5 billion position to bet that the price of Sterling would fall.
However, instead of slowly building up a short position against the sterling, the Quantum Fund could short sell sterling on an unprecedented scale today. Doing so would not only help hasten the tumble of the sterling but also increase the fund’s profit.
It was this decision to “go for the jugular” that netted Soros’s firm over a billion dollars, toppled the Bank of England’s currency regime, and ultimately led to the disgrace of the Prime Minister. It also cost the British taxpayers billions.
Soros did the nasty deed by playing the exchange rates and shorting the pound.
And so that morning [ the day of the meltdown] Soros and his fund increased their short position against the British pound from $1.5 to $10 billion. It was the perfect bet with a mitigated downside and a limitless upside.
As Europe slept, Soros borrowed and sold pounds from anyone that he could. The Quantum Fund’s position exceeded $10 billion shorting the pound. Other hedge funds got wind of the trade (and the report from the Bundesbank) and started following suit, also borrowing and selling pounds.
At 7:30 PM that night, Lamont held a news conference to announce that Britain would be exiting the ERM and floating its currency on the market. Soros and the speculators won.
British financial history now refers to September 17, 1992, as “Black Wednesday;” George Soros, however, probably calls it something like “Awesome Wednesday.” Once Great Britain floated its currency, the pound fell 15% versus the Deutschmark and 25% versus the US Dollar.”
“More Money Than God,” written by Sebastian Mallaby, tells the tale of how Soros used his Quantum Fund to break the pound to pieces and pocket a billion dollars. The Atlantic has printed an excerpt from the novel, which has some interesting notes:
- The Bank of England’s plan was to aggressively buy the pound in hope that it would inspire confidence and stop speculators from destroying the currency.
- Germany’s central bank began to attack Britain, calling for a devaluation of the pound.
- Soros had AT LEAST $1.5 billion bet on the pound since August, 1992. The devaluation crisis occurred a month later in September.
- Instead of steadily building up a position in September of 1992, Soros told his lieutenants to “go for the jugular.”
- Investor Louis Moore Bacon worked with Soros to find ways to dump the pound.
- Britain had to raise interest rates to protect the pound, but Prime Minister John Major refused to authorize the hike. Ultimately, he capitulated.