- Japan's Central Bank Retreats From Credit Markets
- US GDP Encouraging, But Difficulties Remain: Geithner
- Stocks Unlikely to be Spooked on Halloween Eve
- China's Nasdaq-Style Market Makes Strong Debut
- Health Bill Hikes Taxes for Rich, but Could Cut Deficit
- Obama's Too-Big-to-Fail Plan Attacked in Congress
- Think You Understand Markets? Prove It
- Apple Wins Cellphone Market Share, Motorola Struggles
- Michael Jackson Movie Earns $20 Million on First Day
- Barbie's Sugar Daddy?
- 11 Stocks to End Year 'Strongly': Chief Investor
- Hollywood's Halloween Poem
- Exxon Still a 'Good Place' For Investors: Energy Analyst
- Are Market Bulls Phanatic About the Phillies?
- Holiday Surveys: Putting Tinsel on a Charlie Brown Tree
- Seven Deadly Sin Stocks on the Move
- Why The Market's Up, But Merck's Down
- Warren Buffett Beats Bill Gross As Best Investor - Bloomberg Poll
MOST SHARED
- Home Buyer Tax Credit: Final Deal?
- Mad Mail: Go All In on Gold?
- Buffalo Wing Prices Get Out Of Control
- Is The Rally Back On, Or Was GDP A Head-Fake?
- Apple Fan Alert: The iPhone Costume—And It Works
- Michael Jackson Movie Earns $20 Million on First Day
- $igns of Life In Venture Capital
- 11 Stocks to End Year 'Strongly': Chief Investor
- Senate Unveils Compromise Deal On Housing Tax Credit
Text Size 
Billionaire investor and philanthropist George Soros said on Thursday that the world's current "currency arrangements" are fraught with danger and that the world needs global regulation.
 |
Eugene Hoshiko / AP |
Soros, who runs hedge fund firm Soros Fund Management and has made his reputation with bold currency bets, said the U.S. dollar ought to be falling in value against the Chinese currency to allow the United States to contain its current account deficit.
However, Soros said because the renminbi is tied to the greenback, the Chinese currency is constantly undervalued leaving the dollar to sink against the world's other major currencies.
The dollar has lost about 7 percent this year against a basket of the world's major currencies.
Meanwhile, an undervalued yuan makes Chinese consumer goods cheaper in foreign markets. Beijing has powered the country's growth by targeting U.S. and other consumer markets with its exports, putting many producers in those markets out of business because they cannot compete.
Soros, who earned $1 billion in 1992 by betting against the British pound, said current currency arrangements are "fraught with danger."
He said that the globalization of financial markets was built on a "false pretense" that financial markets could be left to their own devices and said global regulation was needed.
"That is a tremendous challenge," he said at an event sponsored by the Economist magazine held at the New York Stock Exchange.
Soros spoke only hours after the U.S. Treasury Department said that China is not manipulating its currency but is piling up foreign exchange reserves at a rate that threatens progress in reducing global economic imbalances.
Turning to the world economy, Soros said "the world economy is going to have some growth, but we are bound to be flat."
He also said the U.S. is going to be a drag on world growth.
In China, Soros said he also believes there is a something of an asset bubble.
More from CNBC.com
- Where, what and how.
- A good chunk of the $4.75 billion expected to be spent on Halloween will go to costumes.
- Private technology and government policy are creating rapid change.
- Cramer predicts the price per thousand cubic feet will rebound to $6 or $7 in 2010.
- Unilever offers its employees a personalized nutrition program that helps keep their diets balanced.
- CNBC contributor David Pogue reviews three new rivals to the iPhone.
Data is a real-time snapshot *Data is delayed at least 15 minutes