Warren Buffett Sits On $50 Billion Cash-Hoard, Waiting For Bubbles To Pop
Jeff Nielson: Warren Buffett’s “game” is getting old, like Buffett himself. He panders shamelessly for the Big Banks of Wall Street, 24/7; and in return; these market-rigging criminals tell Buffett what to buy – and when to buy it. This allows Buffett to pretend to be a “market oracle”, a gig which has worked out very, very well for the multi-billionaire.
Buffett’s shtick is that he is “a long term investor”, which brings us to the crux of this piece. In order to be a “long term investor”, one must have nearly all of their money deployed, nearly all of the time. The entire concept of long-term investing is based upon the premise of having one’s capital “working for them”, as particular investment opportunities mature and ripen.
Obviously the $50+ billion which Buffett is currently hoarding on behalf of himself, Berkshire Hathaway, and its (wealthy) shareholders can’t “work for them” when it’s sitting on the sidelines. Thus the only exception to the standard practice of all long-term investors to be fully invested in the market (or nearly so) is when they are expecting a large and imminent “correction”.
When vampires like Buffett (knowing in advance what will happen) sit on an especially large pile of cash, it’s because they are expecting a particularly large correction (i.e. a crash). When such a Vampire is sitting on the largest mountain of un-deployed cash in the 40+ year history of Berkshire Hathaway, it can only be because he is expecting the Mother of All Crashes.
Here we come to the large, logical disconnect, which exposes Buffett as the pawn that he is. As noted in a recent commentary; officially the U.S. economy is now in a Never-Ending Recovery. Despite the fact that this supposed “recovery” is now already twice as long as any ordinary recovery; we’re told by the bankers, the U.S. government, and the Corporate media (i.e. all of Buffett’s friends) that this Recovery continues to “improve” (even after more than 5 years), and shows no sign of ever ending.
Why is this? Because the U.S. Recovery is a magical recovery. It can “grow” without jobs. It can “grow”without spending. It can even “grow” without using any energy. In fact, in the magical U.S. economy it’s gasoline-powered automobiles can now be operated without gasoline. Yet Buffett the Investor is currently waiting for the Mother of All Crashes, with the largest bet in the history of Berkshire Hathaway.
Understand that Buffett is not allowed to short U.S. markets with this massive hoard of capital, the logical way for a long-term investor to be “fully invested” when expecting a correction. That would be pushing against all of the equities-bubbles which his Masters have been pumping-up so diligently over the past 5+ years, and they are not yet ready to place their own “short” bets — confident they can pump-up these bubbles still further before staging the next crash.
Their bets always come before those of Buffett and the Berkshire Hathaway club, and Buffett understands his place in the pecking order. However, for similar reasons it’s impossible for Buffett to simply wait until just before the preordained crash, and then pull all/much of his funds out of the market, all at once.