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A hedge fund titan is issuing a remarkably dire warning on the fate of the global economy, according to a new report.
Elliott Management says the world is currently on the road to hyperinflation, which could trigger “global societal collapse and civil or international strife”, reports the Financial Times.
The $56 billion asset manager points the finger largely at central bank money-printing policies enacted during the pandemic, and says policymakers were incorrect and disingenuous to name supply chain disruptions as the root cause of inflation.
Elliott believes the bottom for global markets has not yet been reached.
Given the economic calamity currently underway, the firm says a 50% drop from market highs is likely.
To date, the S&P 500 has sunk from a high of 4,818 to a low of 3,491 – representing a 27% drop.
According to Elliott, the next wave of negative market catalysts could include short-term loan losses at banks, possible collateralized loan obligation markdowns and potential fallout from leveraged investments in private equity.
The firm notes that its dire scenario is not a certainty.
But Elliott believes there are simply too many “frightening and seriously negative possibilities” to ignore, and a “seriously adverse unwind of the everything bubble” may remain on the horizon.
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