Key Points
- Billionaire hedge fund manager, Paul Tudor Jones, is betting on Bitcoin and gold as hedges against inflation.
- The U.S. national debt has risen to $35.7 trillion, causing concerns about the state of the economy.
Paul Tudor Jones, a billionaire hedge fund manager, recently shared his strategy for dealing with inflation during a CNBC Squawk Box interview.
Jones is focusing on assets like gold, Bitcoin [BTC], commodities, and Nasdaq tech stocks, while avoiding fixed-income investments.
Gold and Bitcoin’s Performance
Both gold and Bitcoin have demonstrated strong performance this year, highlighting their roles in hedging against inflation.
Gold reached an all-time high of over $2,750 per ounce on October 23, driven by factors such as the upcoming U.S. elections, the Middle East conflict, and expectations of further monetary easing.
Bitcoin, the leading cryptocurrency, has also seen significant gains. According to CoinMarketCap, Bitcoin’s value has increased by over 117% in the past year.
The State of the U.S. Economy
Jones also discussed the increasing U.S. national debt, which has surged from 40% to 100% of GDP over the past 25 years and now stands at $35.7 trillion.
Additionally, the Consumer Price Index rose by 0.2% MoM and 2.4% YoY, according to J.P. Morgan’s September CPI report.
The only way for a country to escape such high levels of debt, according to Jones, is to inflate its way out. This would involve keeping interest rates below inflation and creating a small tax on consumers.
Combined with nominal growth above inflation, this strategy could help reduce the debt-to-GDP ratio over time.
Jones’ strategy of incorporating traditional and digital assets in his portfolio continues to garner attention, reflecting how investors are dealing with economic uncertainty.