Soros sees chance of recession in 2007

Billionaire investor George Soros said the U.S. Federal Reserve might overshoot in its bid to tighten monetary policy, deflating housing prices and tipping the economy into recession in 2007. A collapse in U.S. housing prices could be associated with a dollar decline, Soros told an audience at the Singapore Institute of International affairs.

Soros said he believed the U.S. housing bubble, a major factor behind strong U.S. consumption, had reached its peak and was in the process of being deflated. "If housing continues to cool while rates are slowing then it could turn into a hard landing," Soros said. "That's why I expect a recession to happen in 2007, not 2006."

The 75-year-old investor turned philanthropist, said the world economy faced two other significant risks - the U.S.-led war on terror and global warming. Soros said global warming threatened humankind and should be tackled by penalizing carbon emissions, instead of the current system of rewarding companies that reduce pollution. "Our civilization is at stake," he said.

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