Soros: US economy "won't recover this year"

Reuters reports billionaire investor George Soros told Reuters Financial Television on Monday that he thinks the U.S. economy should brace for a "lasting slowdown" and investors and consumers should not expect a recovery this year.  Soros also said the U.S. banking system is "basically insolvent." He warned that the relaxation of mark-to-market accounting rules last week may "[create] conditions for prolonging the life of U.S. 'zombie' banks." 

Soros criticized the U.S. system in general that has allowed the U.S. to spend more than it earns. He believes reform is necessary. "That is coming to an end and it will not be allowed to recur. There will have to be some change," he added. 

Soros also noted that the U.S. dollar, which has been under significant pressure, may be replaced as the world reserve currency. Soros mentioned the IMF's Special Drawing Rights, a "synthetic currency basket comprising dollars, euros, yen and sterling," as a possible replacement. 

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