What does George Soros know that the rest of the world doesn't? When news leaked out that he had purchased a $400 million stake in the largest U.S. gold-mining company, investors piled into the market, pushing the price of the precious metal to a 17-month high two weeks ago. Last week gold soared to a two-year high. Was Soros betting on a new era of inflation caused by governments' printing their way out of debt? Was he hedging against some looming financial Armageddon?
Soros the Speculator was not saying, but in a sense it didn't matter. The mere fact that he was buying into gold was enough to cause a stampede. When unexpected reports of inflation caused the price to rise again last week, it just seemed to confirm his legendary nose for the market. After all, this was the man who led the raid on the Bank of England during last September's European currency crisis, a robber baron, as some called him, who emerged with profits estimated at $2 billion by selling sterling short.
Like King Midas, George Soros has the golden touch. But unlike the miser of mythology, he is happy to part with his wealth. A latter-day Robin Hood, he takes from the exchequers and pockets of the rich West in order to provide much needed capital for the poor East. After the sterling coup, Soros wasted no time in redistributing the spoils: within the next three months he set up a $100 million fund to support science in the former Soviet Union, organized a $25 million loan to Macedonia and then made the largest single private donation ever to a humanitarian cause when he gave $50 million to aid organizations in Bosnia and Herzegovina.
While Western governments dawdle over assistance to the former Soviet Union and Eastern Europe, Soros, 62, delivers -- perhaps as much as $300 million to date. From his pocket. No strings attached. Since 1984 the financier has provided everything from transmitters for independent radio stations in the former Yugoslavia to scholarships in the West for Eastern academics. Through his New York City-based Soros Foundation, he has funded struggling Czech artists as well as education projects in Albania and Ukraine. His philanthropy has made Soros "the most important single force affecting developments in the region," says Steve Larrabee, a specialist on Eastern Europe at the Rand Corp.
Why does Soros spend his money in a region many consider to be a black hole? "I have a fascination with risk," he says in his heavily accented English. "It makes me feel alive. I can get bored just living." While that confession may explain his activities as a speculator and breakneck downhill skier, it is only part of what drives a man who is himself a refugee from the region.
During World War II in Budapest, the Soros family, Hungarian Jews, became fugitives from Nazi persecution, living under assumed names and at times hiding out in a basement. Soros, his parents and his brother barely survived the war, only to see Hungary fall under the fist of the Soviet Union. It was a harrowing time, yet, in retrospect, a positive one for the young Soros. "Nineteen forty-four was the best year of my life," he maintains. "I was 14 when the world intruded on my life. I was old enough to be aware of what was happening, and young enough to be excited by it."