Gold prices are slightly lower Thursday morning in U.S. trading. Prices should be higher today after continued poor economic data was released on Wednesday but investors are cautious of another pull back. Gold last reported a.m. is $1184.20 and silver is $16.35.
Federal Reserve Chair Janet Yellen spooked global stock markets on Wednesday by warning that stock market valuations are presently very high.
According to reports from Newsmax a handful of billionaires are quietly dumping their American stocks . . . and fast.
Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
Buffett’s holding company, Berkshire Hathaway, has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced its overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
Unfortunately Buffett isn’t alone.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase according to a recent filing. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.
Finally, billionaire George Soros has sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.
So why are these billionaires dumping their shares of U.S. companies? After all, the stock market is still in the midst of its historic rally. Of course the rally is courtesy of repeated pumping by the Federal Reserve and central banks while divorcing itself from the realities of a declining U.S. economy.
Wall Street hasn’t seen a typical correction in several years and this alone should warn us that something is amiss.
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