The Quantum Group of Funds are privately owned hedge funds based in Curaçao (Netherlands Antilles) and Cayman Islands. They are currently advised by George Soros through his company Soros Fund Management. Soros started the fund in the early 1970s along with Jim Rogers.
The shareholders of the funds are not publicly disclosed although it is known that the Rothschild family and other wealthy Europeans put $6 million into the funds in 1969.
In 1992, the lead fund, Soros’s Quantum Fund became famous for “breaking” the Bank of England, forcing it to devalue the pound. Soros had bet his entire fund in a short sale on the ultimately fulfilled prediction that the British currency would drop in value, a coup that netted him a profit of $1 billion(see Black Wednesday). In 1997, Soros was blamed for forcing sharp devaluations in Southeast Asian currencies .
In July, 2011, the Quantum Fund announced they would be ending the fund, and will be returning all outside money by the end of 2011. The fund will now exclusively manage Soros’ family money.
Reuters has George Soros (above) telling us all that the collapse of the euro and break-up of the European Union “would have catastrophic consequences for the global financial system”.
His quote was actually in the Business Line newspaper, delivered while he was in the south Indian city of Hyderabad. “Today”, he says, “the euro is potentially endangering the political cohesion of the European Union”.
He adds: “If the common currency were to break down, it will lead to the break up of the European Union itself. And this will be catastrophic not only for Europe but also for the global financial system”.
Soros thinks that the euro crsis is “more serious and more threatening than the crash of 2008”. In his view, some euro countries may have to take more austerity measures because of the imbalances between the “creditor and the debtor countries”.
“Unfortunately, they haven’t yet solved the acute financial crisis and that is causing the situation to deteriorate…and (it) is not at all clear it will have a solution,” he concludes.
Thus do we see once again the evidence that being a billionaire doesn’t necessarily make you right. He may have got lucky on the ERM, but austerity measures are not the answer. The break-up of the single currency is. And it most certainly will cause problems … but not breaking up will be even worse.
Over the years, Soros has given voice to this sense of grandiosity many times and in a variety of different ways. In his 1987 book The Alchemy of Finance, for instance, he wrote: “I admit that I have always harbored an exaggerated view of self-importance—to put it bluntly, I fancied myself as some kind of god or an economic reformer like Keynes or, even better, a scientist like Einstein.” Expanding on this theme in his 1991 book Underwriting Democracy, Soros said: “If truth be known, I carried some rather potent messianic fantasies with me from childhood,” fantasies which “I wanted to indulge … to the extent that I could afford.” In a June 1993 interview with The Independent, Soros, who is anatheist,5 said he saw himself as “some kind of god, the creator of everything.” In an interview two years later, he portrayed himself as someone who shared numerous attributes with “God in the Old Testament” — “[Y]ou know, like invisible. I was pretty invisible. Benevolent. I was pretty benevolent. All-seeing. I tried to be all-seeing.” Soros told his biographer Michael Kaufman that his “goal” was nothing less ambitious than “to become the conscience of the world” by using his charitable foundations, which will be discussed at length in this pamphlet, to bankroll organizations and causes that he deems worthwhile.
“I realized [as a young man] that it’s money that makes the world go round,” says Soros, “so I might as well make money.… But having made it, I could then indulge my social concerns.” Invariably, those concerns center around a desire to change the world generally—and America particularly—into something new, something consistent with his vision of “social justice.” Claiming to be “driven” by “illusions, or perhaps delusions, of grandeur,” Soros has humorously described himself as “a kind of nut who wants to have an impact” on the workings of the world. The billionaire’s longtime friendByron Wien, currently the vice chairman of Blackstone Advisory Services, offers this insight: “You must understand [Soros] thinks he’s been anointed by God to solve insoluble problems. The proof is that he has been so successful at making so much [money]. He therefore thinks he has a responsibility to give money away”—to causes that are consistent with his values and agendas.
George Soros’s Roots and Development
George Soros was born to Tividar and Erzebat Schwartz, non-practicing Jews, in Budapest, Hungary on August 12, 1930. Tivadar was an attorney by profession, but the consuming passion of his life was the promotion of Esperanto—an artificial, “universal” language created during the 1880s in hopes that people worldwide might be persuaded to drop their native tongues and speak Esperanto instead—thereby, in theory at least, minimizing their nationalist impulses while advancing intercultural harmony. In 1936, Tivadar changed his family surname to Soros—a future-tense Esperanto verb meaning “will soar.”
When the Nazis occupied Budapest in 1944, Tivadar decided to split up his family so as to minimize the chance that all its members would be killed together. For each of them—his wife and two sons—hepurchased forged papers identifying them as Christians; paid government officials to conceal his family’s Jewish heritage from the German and Hungarian fascists; and bribed Gentile families to take them into their homes. As for George in particular, the father paid a Hungarian government official named Baumbach to claim George as his Christian godson, “Sandor Kiss,” and to let the boy live with him in Budapest. One of Baumbach’s duties was to deliver deportation notices to Hungary’s Jews, confiscating their property and turning it over to Germany. Young George Soros sometimes accompanied the official on his rounds. Many years later, in December 1998, a CBS interviewer would ask Soros whether he had ever felt any guilt about his association with Baumbach during that period. Soros replied: “… I was only a spectator … I had no role in taking away that property. So I had no sense of guilt.”
Soros today recalls the German occupation of Hungary as “probably the happiest year of my life.” “For me,” he elaborates, “it was a very positive experience. It’s a strange thing because you see incredible suffering around you and the fact you are in considerable danger yourself. But you’re fourteen years old and you don’t believe that it can actually touch you. You have a belief in yourself. You have a belief in your father. It’s a very happy-making, exhilarating experience.”
In 1947 the Soros family relocated from Hungary to England, where George attended the London School of Economics (LSE). There, he was exposed to the works of the Viennese-born philosopher Karl Popper, who taught at LSE and whom Soros would later call his “spiritual mentor.” Though Soros never studied directly under Popper, he read the latter’s works and submitted some essays to him for review and comment. Most notably, Popper’s 1945 book The Open Society and Its Enemiesintroduced Soros to the concept of an “open society,” a theme that would play a central role in Soros’s thought and activities for the rest of his life.
The term “open society” was originally coined in 1932 by the French philosopher Henri Louis Bergson, to describe societies whose moral codes were founded upon “universal” principles seeking to enhance the welfare of all mankind—as opposed to “closed” societies that placed self-interest above any concern for other nations and cultures. Popper readily embraced this concept and expanded upon it. In his view, the open society was a place that permitted its citizens the right to criticize and change its institutions as they saw fit; he rejected the imposed intellectual conformity, central planning, and historical determinism of Marxist doctrine. By Popper’s reckoning, a society was “closed”—and thus undesirable—if it assumed that it was in any way superior to other societies. Likewise, any belief system or individual claiming to be in possession of “ultimate truth” was an “enemy” of the open society as well. Popper viewed all knowledge as conjectural rather than certain, as evolving rather than fixed.
Thus, by logical extension, Popper did not share the American founders’ confident assertion that certain truths were “self-evident,” and that certain rights—such as the right to “life, liberty, and the pursuit of happiness,” as referenced in the Declaration of Independence—were “unalienable” and thus not subject to doubt, because they had been granted to mankind by the ultimate authority, the “Creator.” We shall see that George Soros, as he grew to maturity, would likewise reject the founders’ premise. Indeed Soros would harbor great disdain for modern-day American political figures who displayed unshakable confidence in their own culture’s nobility, and who embraced the tenets of the Declaration and the U.S. Constitution as timeless, immutable truths. To Soros, “Popper’s greatest contribution to philosophy” was his teaching that “the ultimate truth remains permanently beyond our reach.”
After graduating in 1952 from LSE, Soros joined the London brokerage firm Singer and Friedlander, where he became proficient in international arbitrage, which he defines as “buying securities in one country and selling them in another.” Four years later, he relocated to New York to work as a stock trader on Wall Street. Because Soros “did not particularly care for” the “commercial, crass” United States, he had no intention of settling permanently in America. Rather, he had devised a “five-year plan” to save some $500,000 and then return to Europe. His plan changed, however, when he found work as a portfolio manager at the investment bank Arnhold and S. Bleichroeder Inc., where his career—as if to fulfill the prophecy embedded in the family surname his father had adopted two decades earlier—soared to new heights.
In 1959 Soros moved to Greenwich Village, New York, where early stirrings of the Sixties counterculture were already being felt. In September 1960 he married Annaliese Witschak, who would be his wife until the couple divorced 23 years later. In 1961 Soros became a U.S. citizen, and two years later he and Annaliese had their first child, a son. In the Village, it is likely that Soros was exposed to the ideas of the prominent socialist Michael Harrington, who mingled with fellow radicals and socialists almost nightly at a tavern situated barely a stone’s throw from Soros’s residence. In 1962 Harrington wrote The Other America, a book lamenting the fact that a substantial “invisible” underclass continued to exist even as the country at large prospered, and suggesting that a “war on poverty” was needed to rectify this. President Lyndon Johnson read and admired the book, and its ideas greatly influenced his Great Society policies of government-imposed redistribution of wealth.
Another prominent Village personality of the era—the poet, New Left radical, and psychedelic-drug guru Allen Ginsberg—would eventually become a “lifelong friend” of Soros. Though Soros may not have formally met Ginsberg until around 1980—long after his years in the Village—the billionaire today credits Ginsberg for having opened his eyes to the benefits of drug legalization, which has been one of Soros’s pet projects throughout his philanthropic career.
In 1969 Soros established the “Double Eagle Fund” for Bleichroeder with $4 million in capital, including $250,000 of his own money. Four years later, Soros and his assistant at Bleichroeder, Jim Rogers, set up a private partnership called Soros Fund Management. They subsequently changed the Double Eagle Fund’s name to The Soros Fund. In 1979 they renamed it again—The Quantum Fund; its value grew to $381 million by 1980, and more than $1 billion by 1985.