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Veteran investor Paul Tudor Jones favours investing in bitcoin, gold, commodities and tech stocks, as he warns that inflation will follow the US election. He expressed scepticism about the Federal Reserve’s 2% interest rate goal, saying that the US government’s spending habits and proposed tax cuts would make this unachievable. Believing that the only way to resolve this would be via inflation, he also noted that the Congressional Budget Office predicted a projected federal deficit of $1.9 trillion by 2024, increasing to $2.8 trillion by 2034. Investors have reportedly moved towards the ‘debasement trade’, investing in gold and bitcoin due to concerns over government deficits. Notably, bitcoin’s current value is around $67,000, up over 50% from the beginning of the year.

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Veteran investor Paul Tudor Jones is super into Bitcoin and other commodities right now. He thinks inflation is the endgame following the US presidential election. Speaking on CNBC’s Squawk Box recently, Jones mentioned his optimal investment portfolio would include Bitcoin, gold, commodities, and tech stocks, with no investments in fixed income.

Turns out, the average US consumer expects inflation to rise by about 3% within the next year, according to stats by the Federal Reserve Bank of New York. Yet, the Federal Reserve aims for a 2% per year inflation goal.

Jones says the current spending habits of the US government, coupled with proposed tax cuts, make these goals unrealistic without big policy changes. In his words, “we’re going to be broke really quickly unless we get serious about dealing with our spending issues.”

The Congressional Budget Office predictions don’t paint a pretty picture either — it estimates the federal deficit hitting a whopping $1.9 trillion by 2024 and growing to $2.8 trillion by 2034. According to Jones, the only way out of this mess could be through inflation, just like Japan is doing.

Reportedly, investors are gearing up for the worst with the “debasement trade,” stashing their wealth in gold and Bitcoin. This move, as explained by JPMorgan, arises from various factors like heightened geopolitical conflict and concerns over persistent high government deficits among major economies.

Interestingly, Bitcoin’s popularity builds up after a dip, suggesting that this could be the new gold. To give you an idea, BTC is currently valued at around $67,000, demonstrating more than a 50% increase since the beginning of the year, as per CoinMarketCap. Now, Bitcoin price targets are starting to edge towards their all-time high of $73,679.

Source: Cointelegraph