Soros: Europe's Three-Month Window by Gary North

George Soros has laid it on the line. The eurozone will begin to break up, followed by the break-up of the European Union, within three months if the politicians do not come to an agreement to re-write the treaties and centralize power. No other figure has been this apocalyptic and this specific as to the timetable.
He sees this outcome as a catastrophe. I keep thinking: "Free at last! Free at last!"
Soros understands the price movements of currencies better than anyone else. This is how he became a multi-billionaire. He has used massive leverage – extremely high risk – to speculate in the currency futures markets, often taking the opposite side of trades with central banks. When a man has enough wisdom to beat the currency futures markets, I give him credit. He knows something about currencies.
In a recent essay, he points out that the 2008 crisis created a new realization that there is no consensus about economic theory. He insists that "economic theory has failed." On the contrary, economic theory has triumphed – Austrian economic theory. In 2007, numerous non-academic, non-tenured Austrians predicted the recession of 2008. I called it in late 2006, predicting a 2007 recession. The National Bureau of Economic Research retroactively dated it as having begun in December 2007 – just in the nick of time!
Soros goes even further. This failure is the failure of academic economic theory.

I believe that the failure is more profound than generally recognized. It goes back to the foundations of economic theory. Economics tried to model itself on Newtonian physics. It sought to establish universally and timelessly valid laws governing reality. But economics is a social science and there is a fundamental difference between the natural and social sciences. Social phenomena have thinking participants who base their decisions on imperfect knowledge. That is what economic theory has tried to ignore.

This is the criticism made repeatedly by Austrian economists, beginning with Ludwig von Mises exactly a century ago: The Theory of Money and Credit (1912). I cannot imagine a better statement of Austrian theory's rejection of mainstream economists' theory.
Soros has no explanation for the business cycle. Austrian economics does: central bank policies of monetary inflation and monetary stability.

Soros: Europe's Three-Month Window by Gary North