One of the world’s largest and most influential hedge funds is warning that “dishonest” policymakers have set the world on the path to potentially the worst period of hyperinflation in modern history, which could result in “societal collapse.”
Elliott Management, a Florida-based firm founded by billionaire Paul Singer, said in a letter this week that an extraordinary set of rash policies during the coronavirus pandemic have “made possible a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period.”
“Investors should not assume they have ‘seen everything’” just because they’ve lived through numerous other financial crises, the letter said, according to the Financial Times, the idea that “‘we will not panic because we have seen this before’ does not comport with the current facts.”
The letter said that “dishonest” policymakers have lied about the causes of inflation, blaming supply chain issues rather than reckless monetary policies due to the pandemic.
One example of this is the Democrats passing President Joe Biden’s $1.9 trillion American Rescue Plan, which even a top Democrat economist said was the “least responsible” economic policy in 40 years. Left-wing Vox conceded that many economists “agree that the stimulus law did worsen inflation by giving people more money to spend.”
The letter warned that the world is “on the path to hyperinflation” and that skyrocketing inflation rates could cause “global societal collapse and civil or international strife.”
The letter warned that the “frightening and seriously negative possibilities” that exist make it so that experiencing a 50% market drop is now a realistic possibility.
White House Chief of Staff Ron Klain continued to claim this week that the U.S. was not in the midst of a recession, even though the country had experienced two quarters of contraction and high inflation rates which have rattled the confidence of consumers despite an increase in economic output during the third quarter.
“We are not in a recession. I want to be really, really clear on that,” Klain asserted. “The economy is growing, it is strong, it is creating jobs.”
Polls consistently reveal that voters have their eyes on the economy and inflation more than other issues, with Republicans leading Democrats by a double-digit margin concerning trust in handling the economy. Although members of the former party criticize the Biden administration and progressive lawmakers for deficit spending even while restricting energy production, members of the latter party claim that their expenditures are meant to decrease the cost of living for households.
Voters nevertheless hold the commander-in-chief responsible for the lackluster economy. In a recent survey from Bankrate, roughly 43% of respondents reported that their finances are worse than two years ago. Among those who reported worse finances, 69% placed “at least a moderate amount of blame” on Biden, while 71% placed blame on Democrats in Congress and a smaller but still salient 54% blamed Republicans in Congress. Although 93% of Republicans with lower financial prospects said Biden is to blame, a considerable 30% of Democrats agreed.
Ben Zeisloft contributed to this report.