09/15/2010 05:34 pm ET Updated May 25, 2011

George Soros: U.S. Economy Is 'Blah' And China's Rise Is 'Phenomenal'

Billionaire investor George Soros began his Wednesday morning remarks, which spanned a broad range of topics on the global economy, with a pithy summary of the U.S. financial situation.

"If I had to sum it up in one word, I would say 'blah,'" Soros said in a hour-long talk with Reuters global editor-at-large Chrystia Freeland. "In other words, it may slip into double-dip, or it may not. But it's going to slow down."

(To see a full video of Soros's remarks, check out this video from Reuters.)

He said it's too early to abandon fiscal stimulus, arguing that the 2009 legislation has been under-appreciated. "It's a counter-factual, because you don't know what it would have been if he [President Obama] hadn't done it," Soros said. "The trouble with a confidence-multiplier is that if reality doesn't live up to your expectations, then confidence turns to disappointment. And that's where we are today."

The thrust of the talk, though, was the rest of the world. China, Soros said, has emerged as the new "motor" of the world economy. Whereas U.S. consumers were the motor before the crisis, Soros said, now the Chinese economy, though "a smaller motor," is what's driving global markets.

"China is a great winner, rising very rapidly because the west is sinking," he said. "The shift of power is phenomenal. I have not seen anything like it. It is difficult to find a parallel. For the rise of a new power, it takes decades, and it's happening here in a much shorter time."

"Today I would say that the Chinese currency is the strongest currency in the world, except you can't own it," he continued. The Chinese government has placed controls on its currency to make sure it doesn't appreciate in value, ensuring that Chinese exports, which have vaulted the country to its current position, remain attractive to the rest of the world.

"If China liberalized, the Chinese currency would actually replace to a large extent the dollar as the store of value," Soros explained. "But they don't want that, because that would destroy the machine that has made them so successful."

He was bullish on the developing world as a whole, citing India and Brazil, along with China, as leaders. "That is the great hope, that the developing world develops faster [than the developed world]," he said. "And that is the positive side of the current situation."

"The so-called 'west' is under pressure. And you include Japan in that," he continued. "And the rest of the world actually makes up for it. That is reason to believe we'll get through this, and it's not going to be such a dismal scenario."

On gold, which Tuesday saw a record high, Soros was more skeptical. Although he called it the "only actual bull market currently," he said gold is "the ultimate bubble, which means it may be going higher, but it's certainly not safe, and it's not going to last forever."

(For a full video of Soros's remarks, check out this video from Reuters.)