An 'awful lot' of US stimulus money was likely used for speculation during the recent Reddit-driven market mania, says billionaire investor Sam Zell
Sam Zelltold CNBC stimulusmoney was likely used for risky investments during the recent Reddit-driven market mania.
- He said many investors were probably using previous US stimulus money to "gamble."
- The investor said the next round of stimulus aid needs to be towards "people who really need help."
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Billionaire investor Sam Zell told CNBC on Tuesday an "awful lot" of US stimulus money was probably used to speculate in
The Equity Group Investments founder said stimulus money that goes to "everybody," including households with incomes north of $200,000 could lead to more speculation and risk-taking in the markets.
"What you're doing is you're just creating a whole bunch of surplus capital that's floating around and everybody's trying to figure out what to do with it, and isn't this a fun way to gamble?" Zell said.
"And since it's the government's money, you didn't have it before, you didn't need it, why not roll the dice and see what happens?" he added.
Zell also said that the market speculation that occurred as investors piled into heavily shorted stocks in recent weeks is "very negative for the
The investor said he hopes the next round of stimulus aid is directed towards "people who really need help." Under President Joe Biden's $1.9 trillion relief package, individual taxpayers making up to $75,000 and couples earning up $150,000 would receive direct stimulus checks of $1,400.
Zell added that outside of the transportation and hotel industries, the economy is in "great shape," and he's worried overstimulating the economy would result in the return of inflation.
The investor also voiced his concerns about over-exciting the US economy through issuing too much debt. A massive debt increase would dissipate the US dollar's reserve currency status, which he called his "single greatest nightmare."
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