Current presidential candidate Donald Trump believed that 2006 was a great time to get into the mortgage business. Another politically involved billionaire, George Soros knew better. Soros, who contributes to campaigns on the other side of the political spectrum, stayed out of the real estate market then, and he is choosing to stay out of the real estate market now. The billionaire believes that the world is heading for another global economic collapse similar to the one that happened during the final year of President George W. Bush’s administration.
In 2008 Banks and other mortgage lenders on http://www.cnbc.com/2016/04/12/soros-european-union-in-mortal-danger.html gave out billions of dollars in home loans to people who could not afford to pay the loans back. People who took advantage of these loans were usually given an adjustable rate mortgage. While the adjustable rate mortgage can be advantageous financially, many people defaulted on their home loans when the interest rates went up. This led to a housing crisis and caused the value of many homes to go down. Toxic debt forced Lehman Brothers to close and the federal government forced other banks to take money under a program called the Toxic Assets Relief Program.
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Economists have suggested that another bubble might occur because of the high rates of student loan default, but George Soros does not believe that student loan debt will lead to the next economic collapse. He points to the bailouts of Greece and economic conditions in China as the most likely cause. Even though contributions from France and Germany kept Greece’s economy from collapsing, it is not certain that there will not be a relapse. Austerity measures designed to ease the country’s economic woes on https://www.facebook.com/breakingpolitical/posts/1562000144097945 have rallied the electorate against the government, and many similar movements are seen across Europe.
China faces a different problem, and it is one that is caused by the government’s efforts to stave off the effects of the Great Recession. Overbuilding in the country has led to thousands of buildings and no one to occupy them. Once the building projects stop, George Soros believes that this will lead to a second collapse of the global economy. Although he is not sure that the US government can prevent this from happening, he hopes to reduce the effects of an upcoming crisis by electing the right president. He has chosen to donate to former Secretary of State Hillary Clinton’s presidential campaign.