“Investors shouldn’t assume they’ve ‘seen everything.’ “
Those are the executives of leading hedge fund company Elliott Management Corp. warned that the world was headed for the worst financial crisis since World War II.
In a letter to investors, and reported as Financial TimesThe Florida-based company told clients it believes the global economy is in an “extremely challenging” situation that could lead to hyperinflation.
Elliott did not respond to MarketWatch’s request for comment.
The company, led by billionaires Paul Singer and Jonathan Pollock, tells its clients that “investors shouldn’t assume they’ve ‘seen everything'” because they’ve experienced highs and lows. of the crash of 1987, the dot-com boom and bust, the 2008 global financial crisis, and the bear and bull markets that preceded it.
It added that the “extraordinary” era of cheap money is coming to an end and has “produced a set of outcomes that may be at or beyond the boundaries of the entire post-World War II period.”
The letter reportedly said the world is “on a path to hyperinflation,” which could lead to “global social collapse and civil or international conflict.”
Elliott has argued that the market hasn’t fallen enough and that a stock market drop of more than 50% is “normal,” adding that it’s impossible to predict when that will happen. S&P 500
SPX,
has fallen 19% from its peak at the beginning of the year.
Elliott executives warn clients that the idea that “”we won’t panic because we’ve seen this before” “doesn’t fit with current reality.”
They blamed central bank policymakers for the current global economic situation, saying they had been “dishonest” about the reasons for high inflation. They said lawmakers shirked responsibility by blaming supply chain disruptions caused by the pandemic instead of citing the loose monetary policy introduced two years ago during its peak. COVID-19.
See: How activists at Elliott Management talk to executives at PayPal after revealing company shares
The FT reports that the hedge fund has returned 6.4% so far this year and has only lost two years in its 45-year history.
