Billionaires Dumping Stocks, Economist Knows Why

It starts with the reckless strategy of the Federal  Reserve to print a massive amount of money out of thin air in an attempt to  stimulate the economy.

“These funds haven’t made it into the markets and  the economy yet. But it is a mathematical certainty that once the dam breaks,  and this money passes through the reserves and hits the markets, inflation will  surge,” said Wiedemer.

“Once you hit 10% inflation, 10-year Treasury  bonds lose about half their value. And by 20%, any value is all but gone.  Interest rates will increase dramatically at this point, and that will cause  real estate values to collapse. And the stock market will collapse as a  consequence of these other problems.”

And this is where  Wiedemer explains why Buffett, Paulson, and Soros could be dumping U.S.  stocks:

“Companies will be spending more money on borrowing costs than  business expansion costs. That means lower profit margins, lower dividends, and  less hiring. Plus, more layoffs.”

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