We are facing the greatest crisis since World War II and hyperinflation.
Elliott Management is one of the largest investment funds in the world, and the portfolio of its companies as at the end of June 2022 amounted to a total of $ 56 billion.
As is clear from the letter addressed to investors, hyperinflation could trigger the worst financial crisis since World War II. Today we are watching record price increases in many countries around the world, including in the USA, where inflation this year was at its highest in over 40 years.
The letter contains a strong warning to customers. With the end of the cheap lending era, the authors say, it will become increasingly difficult for investors to make a profit in an extremely difficult macroeconomic environment. The “Financial Times” was the first to inform about the content of the letter.
Investors should not assume that the biggest problems are behind us simply because they managed to get through previous periods of financial difficulties, such as the 2008 mortgage crisis.
The worst is yet to come, according to Elliott Management, although 2022 was already bleak for the markets. According to Bloomberg data, global equities lost a total of $ 28 trillion. However, this is not the end yet.
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Elliott blamed the deteriorating financial situation on the central banks, adding that most of them were unfair about record high inflationattributing price pressure to disruptions in the supply chain and not to loose monetary policy.
Last week, Fed chairman Jerome Powell announced the target level of the interest rate will be much higher than the expectations of investors and other market participants so far. Experts emphasize that Powell’s statement can be read in such a way that interest rate hikes will last longer, but at the same time will not be as violent as before.
“Looming Hyperinflation it can lead to a global social breakdown and internal or international conflicts“The letter reads. Elliott also added that the markets still had room to decline and bottom, while scary and severely negative scenarios remained on the horizon.
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