‘It will take just one gentle tap to send the whole American economy crashing’
For the last couple of months, I’ve been noting various articles in which very rich people are taking some remarkable steps:
- Buffett’s vice chairman dumps over half of his Berkshire shares
- Warren Buffett offloads Bank of America shares worth $982 million in latest sale
- Buffett’s Berkshire offloads Bank of America shares again; total sales near $7 billion
- Berkshire quietly dumps half its Apple shares amid unprecedented selling spree
- Blackrock reveals it’s quietly preparing for a $35 trillion Federal Reserve crisis with Bitcoin
- Jeff Bezos sells another $863.5 million of Amazon stock
Now, clearly wealthy people are always shifting around their financial portfolios. Still, these activities were unusual enough to warrant media attention. This begs the question, what do they know that we don’t know?
Wealthy people (usually) aren’t fools. They watch the economic climate. It’s (usually) how they became wealthy. And the economic climate they’re watching apparently is worrying them.
Now consider these headlines:
- JPMorgan CEO hints at looming crisis worse than recession
- Interest on U.S. debt surpasses $1 trillion for first time ever, exploding August budget deficit to record high
- An economy so strong it requires crisis-level fed action
And, of course:
Conclusion from all these headlines: Something big is coming, and it’s the little people who will get hurt the most.
I don’t like those words. I’m someone who delights in domesticity and prefers peaceful periods. But unquestionably, this year’s election is shaping up to be global in scope, and its impact won’t be limited to within our own borders. What happens in America will impact the rest of the world. As columnist Robert Knight noted, “Elections should never be this important.”
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Everyone is predicting what kinds of bad stuff will happen if Kamala wins. The tax plans and economic policies she’s outlined (including raising the corporate tax rate from 21 to 28% and taxing unrealized capital gains) are making wealthy people nervous.
One hedge fund billionaire said the proposed tax on unrealized capital gains on individuals making $100 million or more was particularly troubling and “would cause mass selling of almost everything – stocks, bonds, homes, art – I think it would result in a crash in the markets and an immediate, pretty quick recession.”