George Soros predicted that Britain would be forced to devalue its currency and exit the ERM. Others traders expected Britain to lower the value of its currency but did not expect it will exit the ERM. His bet was correct and ended up making billions of dollars in a single day and breaking the financial system of Great Britain.
Life changing conference
Before winning the bet, George Soros was rich, but he had not established himself as a public personality and a philanthropist. He was the head of a Quantum Fund that specialized in placing bets on macroeconomic trends. On September 16, 1992, the news about Britain exiting the ERM and devaluing its currency was publicized through a press conference held by Lamont.
A group of traders led by George Soros emerged as the winners. Soros’s Quantum Fund had loaned out billions from other traders to finance the bet. It is believed that Soros’s fund could have lost a whopping $15 billion if the bet did not go according to the prediction. However, the trade generated profits on https://en.wikipedia.org/wiki/Soros_Fund_Management amounting to $1billion in just a single day. After the pound had devalued, the fund increased from $15 billion to $19 billion. He gained public attention, and he has managed to maintain his status up to now. For Soros, it was time to rejoice, but for Britain and its taxpayers, it was a crisis. The popularity of hedge funds increased tremendously after the Quantum Fund’s success.
The consequences of Black Wednesday
After flooding the currency, the Britain’s pound decreased by 25% compared to the United State Dollar and 15% compared to Deutschmark. According to British financial history, September 17, 1992, is a Black Wednesday on www.valuewalk.com/2016/05/george-soros-broke-gbp-trade-century/.
About George Soros
George Soros is a prominent investor, an active philanthropist, political donor, activists, and an established author. George Soros established Soros Fund Management and serves as its chair up to date. He was born and raised in Budapest 1930 but relocated to England in 1947. He is an alumnus of London School of Economics holding a degree in economics. Later on, he moved to the United States and accumulated a significant amount of wealth through his international investment fund.
Soros created the Open Society and serves as the Chairman of the organization. The society comprises of series of foundations, partners, and programs in over 100 countries. George Soros’ goal is to establish a society where human rights are respected, and the accountability of the government is questioned. Soros began philanthropic activities in 1979, sponsoring South African students under the oppressive apartheid regime to attend college and establish a successful professional career. He is a top author, and his fourteen books have gained tremendous popularity among readers. Soros covers a wide range of topics such as economics, philanthropy, politics, and globalization.