SEATTLE - George Soros, the outspoken billionaire hedge fund investor and philanthropist, said a short and decisive victory in Iraq would provide brief economic relief, but warned Thursday that U.S. military policy is creating a dangerous "bubble of American supremacy." "Removing the uncertainty (about a war in Iraq) would be a positive for the stock market and the economy. A reduction in the price of oil would be a major positive," Soros said at an event sponsored by the anti-poverty group Global Partnerships in Seattle. Hungarian-born Soros, renowned for his bet against the British pound that ejected it from Europe's single-currency launch, said a nascent economic recovery could be choked by increased spending, which is fueling a government deficit. "The deficit policy that we are now pursuing is a very dangerous one. Not in the near term -- because as long as the economy is languishing there is no negative effect on interest rates. But the moment the economy shows signs of life, interest rates would jump because of the budget deficit and choke off the recovery," Soros said. He lashed out at President Bush's preparations for war with Iraq, repeating his argument published in several newspaper editorials this week that the Bush administration's willingness to use military power to assert U.S. dominance is creating a backlash that is feeding on itself. "The current pursuit of American supremacy reminds me of the boom-bust process, or a stock market bubble," Soros said.
"A rogue regime like Saddam Hussein's does pose a threat to the rest of the world. ... But military force must remain a last resort and it must have some basis of legitimacy," Soros said. The United States and Britain failed on Thursday to win support for a U.N. Security Council resolution to authorize a looming invasion of Iraq, as the U.S. military beefs up its presence in the Middle East in preparation for war. Bush's closest ally, British Prime Minister Tony Blair, is facing strong anti-war sentiment in his country, while France remains steadfastly opposed to a U.N.-sanctioned ultimatum. "Whatever the outcome in Iraq, I dare to predict that the Bush policies are bound to fail," Soros said. Soros said that the Sept. 11 attacks on the United States have made it difficult for political opponents and public figures to voice opposition to Bush's policy on Iraq. "I believe that President Bush is leading the United States and the world in the wrong direction, and I consider nothing short of tragic that the terrorist threat has induced the country to line up behind him so uncritically," Soros said.//