Hedge fund Elliott Management believes that the Fed is dishonest about the causes of inflation, leading the world to hyperinflation.

(Reuters)

[Financial Channel/Comprehensive Report] Elliott Management, a world-renowned large-scale hedge fund, warned that the world is heading for hyperinflation and may usher in the worst financial crisis since World War II. The Federal Reserve (Fed) is "dishonest" about the causes of inflation is the culprit.

According to comprehensive media reports, Elliott, headquartered in Florida, was founded by billionaire Paul Singer and manages assets of US$56 billion (about NT$1.78 trillion).

A few days ago, the fund wrote a letter to warn clients that the global economy and financial markets are facing a very challenging situation.

Please read on...

Elliott wrote in the letter that with the end of the cheap money period, there has been a series of extraordinary financial extremes in the recent past, and the consequences may reach or exceed the scale of all crises after World War II, even if investors experienced the bear market of 1970. And the oil price crisis, the stock market crash in 1987, the dot-com bubble in 2000, and the financial tsunami in 2008, don’t think that you know everything you’ve seen, the world is clearly heading for hyperinflation, which may lead to conflicts at home and abroad and lead to global society collapse.

Elliott also said that with multiple risks coming together, the market hasn't fallen enough, and a 50% pullback from its highs is quite normal, suggesting the stock market's downside isn't over.

The S&P 500 is now down 20% from its highs, while the Nasdaq is down 1/3.

Elliott believes that the culprit behind today's global economic situation is Fed officials, because Fed officials were not honest enough about the reasons for high inflation in the past. They knew that the problem was the ultra-loose monetary policy implemented at the height of the epidemic two years ago, but they were still ignorant. Blame the supply chain disruptions caused by the outbreak.

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