Skip to comments.Hyperinflation could cause worst economic crisis since WWII, Elliott Management warns
Posted on 11/06/2022 1:26:45 PM PST by george76
The global economy is at risk of crippling hyperinflation and “extraordinary” conditions that could prompt the worst financial crisis since World War II, according to major hedge fund Elliott Management.
Elliott Management, led by famed billionaire investor Paul Singer, warned clients that extreme conditions present in the current economic landscape have “made possible a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period
The letter also cautioned that economies around the world are “on the path to hyperinflation” — a term referring to uncontrollable acceleration in the cost of daily necessities.
While hyperinflation is not inevitable, Elliott said it would cause “global societal collapse and civil or international strife” if it does occur.
current conditions are uniquely dangerous, even when compared to past financial crises such as the Great Recession in 2008 and the 1970s inflation surge.
“Investors should not assume they have ‘seen everything
The tech-heavy Nasdaq is down nearly 35%, while the Dow Jones Industrial Average has fallen about 12%.
Elliott stated that markets face an array of “frightening and seriously negative possibilities” – with a 50% decline in equities a “normal” potential outcome given the risks.
The firm also took aim at the Fed and other central bankers, accusing policymakers of exacerbating the current trouble and being “dishonest” about the root causes of the decades-high inflation currently plaguing American consumers.
Elliott is just the latest prominent voice to raise alarm bells about the global economic outlook.
Hedge fund wizard Michael Burry – whose bet against subprime mortgages was famously chronicled in “The Big Short,” has argued for months that markets are in the midst of “the mother of all crashes.”
(Excerpt) Read more at nypost.com ...
Inflation is NOT cooling.
There are billionaires the establishment pays attention to, and billionaires they ignore.
...but argentina is such a pretty country...
Silly fear porn. Hyperinflation would be 1,000% annual.
Our current inflation is similar to what we had in the 1970s and for many of the same reasons.
The Fed is doing its part to kill inflation. Now voters need to kick out every progressive anti fossil fuel zealot.
I might add a Step 4 or Element 4: Make borrowing MUCH more difficult. The Fed is already doing that to a very limited degree, but we’ve got to drastically scale back the debt-fueled economy. For years, I’ve driven by one “McMansion” development after another and wondered how the heck so many people can afford to live like that. Well, it turns out that many of those folks are young families who, even if they have high salaries, are trying to live beyond their means using debt to “keep up with the Joneses.” Considering our poor productivity numbers as a country, it’s insane for so many people to be at least appearing to live these wealthy lifestyles. That has to collapse sometime.
If we do run out of Diesel fuel as has been projected for the last week of this month inflation becomes irrelevant because everything stops. The main concerns become food, water and defense of whatever you have of it.
I vote for SloJo’s face on the $100 billion notes.
The death of Sidney, Nebraska: How a hedge fund destroyed ‘a good American town’.. Paul Singer has very few fans in this town of 6,300 people .. Cabela’s to Bass Pro Shops was announced in 2016, a year after Singer’s Elliott Management disclosed an 11 percent stake.
They absolutely ruined Cabelas. Hate to shop there now.
“Hell is coming. … This was a feeling like I’ve never had. Like there’s a tsunami coming. The tsunami’s coming in. You feel it in the air. The tide starts to roll out. And on the beach, people are playing and having fun like there’s nothing’s going on. And that is a feeling I’ve had for the last two months,” he said.
I still remember Ackman on CNBC saying he’ll is coming.......almost perfectly timed the stock market bottom.
These people often have their own motives. Listen to them at your own risk.
The fed is the problem….
Hyperinflation is usually defined as an inflation rate of 50% or more per MONTH. Anything is possible, but the US has never had anything like that in its history.
My concern is that if the dollar loses its role as the reserve currency in international transactions, and the rest of the world no longer want to hold dollars, we could see much higher rates then we ever seen.
Baloney. In Turkey inflation is 85% by government stats, up to 200 by shadow stats. Here 8.5 (lol) in the Uk 10%, Germany 10%, Poland 17, Estonia 22.
In this connected world, if one place like Turkey goes hyper, it will spread rapidly. You are kidding yourself to blow this off because it isn’t at a thousand yet.
Like the famous quote about bankruptcy. Slowly at first, then suddenly.
“In this connected world, if one place like Turkey goes hyper, it will spread rapidly.”
GDP of Turkey $ 0.854 Billion
GDP of California $ 3.4 Trillion
I suppose there are people who believe scare stories like “Turkey will spiral America into hyperinflation” but no one should take that foolishness seriously.
“The fed is the problem….”
They are when they monetize the national debt increases ordered by Congress.
But these latest price increases are also coming from Biden’s war on fossil fuel and the handouts of pandemic money while people were prevented from working.
The Fed has started choking off the growth of the money supply like they did during Volcker. But we also need an administration that isn’t throttling energy production and handing out what amounts to welfare for the world.
GDP of Turkey $ 0.854
GDP of California $ 3.4 Trillion
“My concern is that if the dollar loses its role as the reserve currency in international transactions, and the rest of the world no longer want to hold dollars, we could see much higher rates then we ever seen.”
The reserve currency aspect may be overrated. People regard the dollar as a safe haven for reasons other than that. Our huge bond market and highly developed banking system are very important to foreign investors and foreign banks.
We might have been better off if we hadn’t made the dollar the reserve currency at Bretton Woods. It put us in what is known as the Triffin Dilemma, a conflict between our domestic needs and the eagerness of foreign banks to hold massive dollar balances. There’s more to Triffin than that but you can look it up.
Keynes had warned against making the dollar the reserve currency and advocated something like the Special Drawing Rights that the IMF ended up creating anyway. If we weren’t the reserve currency we probably could have maintained the dollar’s link to gold and avoided the inflation of the 1970s. That inflation actually started by the late 1950s it just didn’t show up dramatically until after Nixon scrapped Bretton Woods in 1971.
Very thoughtfull comments on your part.
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