Originally published September 28 2015
Billionaire investor issues dire warning of the coming global crash
by J. D. Heyes
(NaturalNews) Another billionaire investor who knows the markets cold is warning that there is "danger ahead" for the U.S. economy, even as he advocates for another billionaire, Donald Trump, to become U.S. president.
Carl Icahn, head of the $8.5 billion Icahn Enterprises, is used to the spotlight. However, he rarely makes such bold predictions, especially in public. He issued his warning in a new 15-minute video that outlines the kind of dangers he sees on the horizon.
In the video, Icahn calls for taxes to be lowered for corporations but raised on hedge fund managers. He repeated previous warnings that interest rates hovering close to zero are producing investment bubbles in real estate, art, corporate earnings and high-yield bonds, USA Today reported.
"The middle-class investor has nowhere to go with their money but into the (stock) market, or even more concerning, high-yield bonds, which are very risky," Icahn said in the video, which is posted at his web site, CarlIcahn.com.
In an interview with the paper, Icahn said he produced the video to highlight the "dysfunction" in corporate America and in the nation's capital.
"I want to see this dysfunction obliterated and we get stuff done in Congress," said Icahn, who is also known for pushing his agenda at large, publicly traded companies including Yahoo, Apple and Motorola.
He says that Trump, with whom he briefly sparred in 2010 over a casino, is the best of the current crop of candidates to repair that dysfunction.
"I don't think the other guys understand the major problems we face," Icahn said of the other presidential contenders. "I grew up on the streets in Queens (N.Y.). I never could have been this successful in any other country in the world. I hate to see it go down the tubes and that's what's sort of happening. We're losing our hegemony. I really believe it."
Earlier this summer, Trump said he would "love to bring my friend Carl Icahn" on as his Treasury secretary. He also said that Icahn would be recruited to negotiate with China. However, Icahn says he can't sign on for that gig as he currently has "a day job." However, he told USA Today that he would consider helping Trump in other ways.
"I'd be happy to help him in any way I could," Icahn said. "I'm thought of as a good negotiator."
In particular, these are the reasons that Icahn sees economic storm clouds gathering on the horizon:
- Like Trump, Icahn believes that hedge fund managers are not paying enough in taxes. Trump, in his tax reform proposal, would raise rates on hedge fund managers by eliminating some current loopholes.
- Icahn believes that interest rates are too low and are being held down for reasons that are harming the remainder of the U.S. economy. He says he agrees with critics who tied the 2008 financial meltdown in the real estate and financial markets with the low rates that preceded the crash.
- Financial bubbles involving the rise in junk bonds and other sectors of finance and the general economy are going to burst soon. Included in this phenomenon is a sort of "merger boom" as companies use funds raised from overrated junk bonds to purchase companies they really can't afford.
- Corporate taxes are simply too high. If they are not lowered, the country will continue to be deprived of revenue and jobs, the latter of which creates more tax revenue. Icahn would love for Congress to find a way to lower corporate rates so that American companies relocate back to the United States from cheaper tax havens on foreign soil. That would give them incentives to repatriate some $2.2 trillion in cash.
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