Billionaire investor George Soros has warned that a Brexit vote this month would make the breakup of the EU “almost certain”.
Soros – who shot to fame in 1992 as the man whose $10bn (£6.9bn) bet against the pound broke the Bank of England – has switched more of his fortune into gold as he anticipates possible shockwaves from a leave vote in the EU referendum.
“If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable,” he said.
Soros said he was confident that support for Britain to remain in the EU would rise in the two weeks remaining before the vote, but in any case there was a good chance the EU will collapse due to the migration crisis and challenges in Greece.
But the recent strength in the pound, which has risen slightly in recent days after falling 10% between last November and April, was a sign that a vote to exit the EU is less likely. “I’m confident that as we get closer to the Brexit vote, the remain camp is getting stronger. Markets are not always right, but in this case I agree with them.”
Soros Fund Management, which manages $30bn for Soros and his family, sold a slice of its share holdings to invest in gold and companies that mine for gold, anticipating a slowdown in growth and further turbulence in global stock markets.
Soros, who made $1bn when his 1992 currency bet forced John Major’s government into a humiliating devaluation and led to sterling dropping out of the exchange rate mechanism, said an EU breakup was another threat to global stability along with concerns over the Chinese economy and a Trump presidency.
In recent months the currency speculator has bet that a devaluation of the Chinese currency, the yuan, was inevitable, earning himself a rebuke from the Beijing authorities.
“China continues to suffer from capital flight and has been depleting its foreign currency reserves while other Asian countries have been accumulating foreign currency,” Soros said in an email to the Wall Street Journal. “China is facing internal conflict within its political leadership, and over the coming year this will complicate its ability to deal with financial issues.”
Gold, considered a safe haven by investors, has risen 17% since January to $1,244 an ounce. Shares in gold miners have soared this year with the Philadelphia Gold and Silver Index up 98% compared with a 3.5% increase in the New York S&P 500 Index.
