American Paul Tudor is bullish on Bitcoin, gold, and commodities as the country edges closer to inflation.
In a recent CNBC interview, Paul Tudor Jones revealed a long position on Bitcoin. The Tudor Investment founder adds BTC to gold and commodities as likely beneficiaries as inflation becomes inevitable post the US election.
Tudor Jones considers the administration to embark on higher government spending and tax cuts. With the US battling a terrible debt situation, the administration will likely honor the election promises by printing money, thus exacerbating inflation.
The legendary investor featured in CNBC’s Squawkbox illustrates their ambition to hedge against inflation through investments in Bitcoin, tech stock, and gold. The investment guru affirmed their resolve to avoid the interest assets.
Tudor Jones calls for Trump’s victory in the November election. As such, he recounts the promises made by the Grand Old Party (GOP) nominee to scale expenditures besides extending huge tax cuts.
Tudor Jones expects to witness a significant inflation uptick as the US money printers roar again to meet the promises. Besides, the investor believes Harris’ victory offers no better solution, as she is matching multiple of Trump’s proposed tax cuts. Also, Harris announced a huge raft of spending promises.
As a Wall Street legend, Tudor Jones accurately forecasted the calamitous market plunge in 1987. The Wall Street Journal would 1988 label the investor as the most watched and conversed man.
What’s the Role of Inflation in BTC and Gold?
Tudor Jones responded to an inquiry on how the high-profile investors reworked their investment strategies to accommodate Trump’s victory in November. He affirmed honesty in adjusting the investment, citing the polling numbers that appear to be a clear move in Trump’s victory.
Tudor Jones explained the strategy as one indicator that more inflation is imminent. As such, the investor notes that all roads indicate inflation engulfing the US economy. He adds that inflation erodes the dollar-doos value to half.
The investor considers inflation plays features the usual hedging suspects, prompting his choice to go long on gold and Bitcoin. He explains that commodities seem ridiculously under-owned, thus going long on them and zero on the fixed income.
US Fiscally Impossible to Repay Debt
Tudor Jones weighs into the September forecast by the Federal Reserve that median core inflation will decline to 2.2% by next year. Investors consider this goal virtually impossible, considering the US’s debt crisis amid the presidential candidates’ huge spending plans.
The investor warns of quick bankruptcy unless the country revises the spending issues. He considers the US fiscal disaster as a $35 trillion debt. The annual tax take is $5 trillion, alongside $2 trillion in consistent budget deficits.
Tudor Jones considers the US is not isolated since other countries are aboard the same boat. Notably, Japan is in a worse situation than the US.
The US debt appears to be spiraling out of control, unlike 25 days ago when it approximated under 60% of GDP, only to double today to 120%. Such leaves the US in an unsustainable, precarious situation unless the government deploys spending brakes.
The legendary investor considers whether the debt markets in the US will provide clarity post the elections. He warns that it is fiscally impossible for the US to settle its debt, with the potential to trigger market upheaval.
Tudor Jones reiterates that the inflation surge is virtually unavoidable, indicating that the path out from the debt is printing more money. Likely, the US will inflate to escape the debt snare. He inquires whether individuals are aware of non-inflationary stores of value.
The Fed will inflate to resolve the debt mess, though retaining nominal interest rates lower than inflation to stimulate economic growth. Investors seeking to preserve wealth mandate smart positioning through alternative assets.
Jones’ bet against the bond market informs his resolve to distance himself from fixed-income products. Many investors would likely assume the approach.
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