Warren Buffett is hoarding cash again, and the last time the legendary billionaire value investor did that was three months before the worst economic disruption in living memory with pandemic global lockdowns of 2020.
Indeed, a long-standing reader of WTI with a good memory may recall a piece we wrote entitled, Warren Buffett is stockpiling cash, in late November 2019.
As we noted back then, the Oracle of Omaha was quietly building a 128B USD cash mountain just months before COVID-19 went from nothing to be as recognizable as a major global brand.
“Warren Buffett is hoarding cash again, and the last time the legendary billionaire value investor did that was three months before the worst economic disruption in living memory with pandemic global lockdowns of 2020”
WEALTH TRAINING COMPANY
You may also recall that we were waving the red flag that a stock market correction was likely imminent in view that the Fed was threatening to taper in light of a make-believe economic recovery.
If you are feeling a sense of Deja Vu, as 93%-vaccinated Ireland goes back into partial lockdown, including midnight curfews with the so-called Delta variant spreading like wildfire across the globe and the Fed starting its tapering this month, November, then that is understandable.
Is history repeating itself as Warren Buffett is hoarding cash again?
The 2020 lockdowns followed by trillions of dollars of central bank money to prevent markets from a meltdown has been nothing short of a moveable feast for the wealthiest asset owners.
The trickle-up wealth affects policy implemented by central banks to keep buying assets, quantitative easing to infinity has made the billionaire investors wealthier beyond their wildest dreams. A handful of billionaires have doubled their wealth in a few years.
“The 2020 lockdowns followed by trillions of dollars of central bank money to prevent markets from a meltdown has been nothing short of a moveable feast for the wealthiest asset owners”
RAY DALIO
We have referred to it as collectivization 2.0, the emergence of a neo-feudal society of a super-wealthy class owning everything and a decimated former middle class, the neo serfs who survive a subsistence lifestyle on declining real wages and some form of universal state income.
The final phase of State Capitalism will be the buying up of all distressed retail and commercial mortgages. A handful of mega-wealthy shareholders, prominent family clans, dynasties, going back generations, will own everything through conglomerates.
“Be fearful when others are greedy, and greedy when others are fearful” – Warren Buffett
The apex of the pyramid of absolute power and wealth will be Vanguard and Blackrock, and by 2028, less than a decade away, they will manage USD 20T of assets.
But keeping with the theme, Warren Buffett is hoarding cash again, the billionaire investors cash pile has hit a record of 149.2 B USD as of November 2021, which is 20B USD more dry powder at hand than in late 2019, just weeks away from the last stock market crash.
So, with the Fed’s tapering starting this month and the likelihood of lockdowns Warren Buffett could be gearing up for his classic play.
“Be fearful when others are greedy, and greedy when others are fearful,” said Warren Buffett.
With a cash mountain of 149.2 B USD at hand, the billionaire value investor certainly has the means to be greedy.
