Shervin Pishevar is one of the most widely respected venture capitalists in the world today. He is the founder and CEO of Investment company, the firm behind the creation of Uber, Airbnb, Virgin Hyperloop and many other huge tech success stories. Shervin Pishevar has also acted as an independent entrepreneur, founding companies like WebOS, Ionside and Social Gaming Network.
But Shervin Pishevar is not knowns just for his impressive business acumen. In what little spare time he finds, Shervin Pishevar also operates one of the most-followed Twitter feeds in the tech industry. He has more than 100,000 followers, who hang on his every insightful word. He recently engaged in a 21-hour tweet storm, in which he digressed on a large number of highly relevant topics.
One of the concrete predictions that came out of that Twitter-fed consciousness stream was the fact that Pishevar believes that a new round of quantitative easing is all but inevitable. He says that even though the Fed has promised to engage in the opposite program, quantitative tightening, it is almost certain that the central bank will respond to any downturn in the market with a new infusion of cheap credit into the market. And it will carry this program out in the usual way, buying massive amounts of Treasure securities from its constituent branches.
Pishevar says that the Fed will never stand by as the market crashes back to 2012 or sooner levels. The central bank’s quantitative easing program, says Pishevar, is the only tool in its arsenal that has consistently proven to be able to work. And this means that it is the one tool to which the bank will inevitably resort when a market crash drives general calamity in the broader economy.
But Pishevar warns that this time things may be considerably different. He says that quantitative easing is losing its edge. He points to the fact that foreign purchases of Treasury securities have dramatically fallen off so far this year. And he believes that further market interventions could spark serious hyperinflation in the years to come.
SWball November 9, 2018