Hedge fund billionaire John Paulson has stated that he will pull his investments from the market if Vice President Kamala Harris wins the upcoming presidential election.

Paulson, known for his success in betting against the subprime mortgage market in 2007, expressed his belief that Harris' proposed economic policies would drive investors away and lead to a market crash, offering his take during an interview on The Claman Countdown on Tuesday, as Fox Business reports.

Paulson specifically pointed to Harris' tax proposals, which he believes could cause significant uncertainty and fear in the markets.

Known as a major fundraiser for former President Donald Trump, Paulson explained that the differences between Harris' and Trump’s economic plans are stark. Trump has advocated for extending the 2017 tax cuts, whereas Harris has suggested allowing them to expire.

She has also proposed increasing the corporate tax rate from 21% to 28% and raising the capital gains tax from 20% to 28%, which would significantly impact high-income investors.

Concerns About Market Reactions to Harris' Proposals

During the interview, Paulson noted that Harris' policies would create "a lot of uncertainty" in the financial markets. He elaborated that these changes, combined with a 25% tax on unrealized gains for individuals earning over $100 million, would likely cause a sell-off in assets. Such a reaction, according to Paulson, would lead to a market downturn, followed by a possible recession.

"It depends on the policy," Paulson said, explaining his reasoning. "I think if Harris was elected, I would pull my money from the market. I'd go into cash, and I'd go into gold because I think the uncertainty regarding the plans they outlined would create a lot of uncertainty in the markets and likely lower markets."

Paulson emphasized that the market's performance can be closely linked to who holds the presidency and the policies they implement.

Plans To Shift Investments into Cash, Gold

Paulson detailed his contingency plan should Harris win the election. He confirmed that he would move his assets out of equities and into safer investments like cash and gold. When pressed on whether he would sell his liquid equities, Paulson confirmed that he would do so if Harris secures the presidency.

The renowned financier's concerns are primarily rooted in Harris' approach to taxation and regulation. He explained that Harris' policy of increasing taxes on corporations and wealthy individuals could scare off investors and lead to a massive sell-off of assets. In his view, this reaction would ultimately drive the markets down and potentially lead to an economic recession.

Comparison With Market Reactions to Previous Presidents

While discussing Paulson's predictions, Fox Business' host Liz Claman brought up past examples of market concerns during presidential elections. She mentioned how similar fears were raised when Barack Obama, Donald Trump, and Joe Biden were elected, yet the markets performed well during their terms.

However, Paulson responded by stating that the market's performance depends on timing and the specific policies enacted by each administration. He believes that the uncertainty caused by Harris' proposals would be more detrimental to the markets than what occurred during the terms of previous presidents.

Paulson's Influence As Major Trump Supporter

Paulson’s remarks carry weight due to his prominent role as a major fundraiser for Trump and his extensive experience in financial markets. His success in predicting the 2007 subprime mortgage crisis gave him significant credibility in the investment community. This has led many to take his market outlook seriously, especially given the stakes of a potential Harris presidency.

Still, Paulson acknowledged that market reactions to political leadership can be difficult to predict. "Well, I would say it very much depends on who's in the White House and who controls Congress," he said, reiterating his concerns about the direction of the economy under Harris’ proposed plans.

Paulson Predicts Mass Asset Selling, Recession

Paulson was clear in his prediction: a Harris presidency could trigger mass asset selling, which in turn would crash the market. His belief stems from the proposed tax increases on wealthy individuals and corporations, which he sees as detrimental to investor confidence. The resulting uncertainty, in his view, could lead to a recession.

Paulson plans to move his investments into cash and gold to shield himself from what he believes would be a volatile market under Harris' leadership. He stated that he would make these moves if she wins, emphasizing that the policies Harris advocates are the key driver behind his decision.

Conclusion: Paulson’s Bold Stance On Harris’ Potential Presidency

John Paulson’s announcement that he would withdraw his investments from the market if Vice President Harris wins the presidential election highlights his deep concern over her proposed economic policies.

He fears that her tax plans, including raising corporate taxes and capital gains taxes, would create market uncertainty and ultimately lead to a crash and recession.

Paulson’s prominence as a hedge fund manager and his successful predictions in the past give weight to his warning, and his plan to shift his assets to cash and gold underscores the seriousness of his concerns.