- Founder of Tudor Investment, Paul Tudor Jones, told CNBC he’s long on Bitcoin, gold and commodities — predicting that inflation is set to increase following the US election on the back of increased government spending and promised tax cuts.
- Tudor Jones says that given the US government’s terrible debt situation, which is forecast to worsen for the foreseeable future, it’s likely that the only way to pay for these election promises is to print more money, exacerbating inflation.
Legendary investor and founder of Tudor Investment, Paul Tudor Jones, has told CNBC’s Squawkbox that he’s hedging against inflation by investing in assets such as Bitcoin, gold, and tech stocks while studiously avoiding fixed interest assets.
Tudor Jones now expects Trump to win the US election. Given the Republican nominee’s promises to increase expenditure and hand out huge tax cuts, Tudor Jones believes we’ll see significant growth in inflation as the money printers fire up again to pay for these promises. But he said that even if Harris wins the outlook isn’t any better, as she’s matched many of Trump’s proposed tax cuts (such as no tax on tips) and also has a huge raft of her own spending promises.
Tudor Jones is something of a Wall Street legend, having correctly predicted the calamitous market crash of 1987. In 1988 the Wall Street Journal dedicated a front page to Tudor Jones, declaring him “the most-watched, most-talked-about man on Wall Street.”
Related: BlackRock Cautious on Fed Cuts Amid Inflation, Despite Rising Crypto ETF Investments
Tudor Jones Pivots to Inflation Plays, Including BTC and Gold
In response to a question about some high-profile investors reworking their investment strategies to account for a Trump victory in November, Tudor Jones revealed “I have also, if I’m being honest, primarily because the polling numbers have clearly moved in this direction.”
When asked what that means for his strategy, Tudor Jones replied “it just means more inflation plays”, adding that he believes “all roads lead to inflation.”
And what exactly are these “inflation plays” I hear you shout, desperate for something to FOMO into before your dollary-doos lose half their value. Well, Tudor Jones says his “inflation plays” are pretty much just the usual inflation-hedging suspects:
I’m long gold, I’m long Bitcoin. I think commodities are so ridiculously under-owned, so I’m long commodities…And I own zero fixed-income.
Paul Tudor Jones, Founder of Tudor InvestmentTudor Jones: “Fiscally Impossible” for US to Repay Its Debt
Despite the Federal Reserve’s September forecast that median core inflation will fall to 2.2% in 2025, Tudor Jones says hitting this mark will be virtually impossible given the debt crisis the US has faced now for years and the spending plans of both presidential candidates:
We’re going to be broke really quickly unless we get serious about dealing with our spending issues.
Paul Tudor Jones, Founder of Tudor InvestmentTudor Jones went on to summarise the fiscal disaster the US government finds itself in, saying it has a debt of US$35 trillion (AU$52.3 trillion), with an annual tax take of just US$5 trillion (AU$7.47 trillion) and consistent budget deficits of US$2 trillion (AU$2.98 trillion)“for as far as the eye can see.”
However he’s not just picking on the US. Tudor Jones also says most other countries are in the same boat and that Japan’s situation, in particular, is even worse than the US.
The legendary investor also pondered whether, following the election, US debt markets might have a moment of clarity where they realise that it’s “fiscally impossible, financially impossible” for the US government to pay back its debt, potentially triggering a significant market upheaval.
Related: Minneapolis Fed Criticises Bitcoin as ‘Useless Piece of Paper’, Citing Risks to Economic Stability
Tudor Jones reiterated his message that rising inflation is virtually unavoidable at this stage, saying that the path out of this debt spiral is more money printing:
The playbook to get out of this is that you inflate your way out.
Paul Tudor Jones, Founder of Tudor InvestmentSo, at least according to Tudor Jones, every which way you look it’s inflation, inflation, inflation.
Anyone know of a non-inflationary store of value I could look into?
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