The billionaire investor Paul Tudor Jones has singled out a strategic portfolio taking positions in Bitcoin, gold, and equities as the best hedge against inflation, citing their strength in a period he sees as likely to be characterized by continuing price pressures.
The combination of this assets, adjusted to volatility, is what the founder of Tudor Investment Corp. called in a recent interview with Bloomberg the best inflation hedge. Jones also lamented that the current economic policies imply that inflationary tendencies will continue to exist in the coming days.
He claimed that U.S. policy makers are deliberately keeping hot economies through keeping real interest rates lower than the inflation rate in an effort to deal with increasing debt burden of the nation.
Bitcoin and Gold Needed to Preserve Value
“I’m going to run really low real rates. I am going to have inflation running hot and I’m going to tax the American consumer to get out of my debt trap,” Jones stated, characterizing what he perceives as Washington’s fiscal approach.
The seasoned investor was warning that the lifespan of such policies is not very long, saying they are effective only “until the people kick you out.” He referred to identical experiences in Japan, to highlight the vulnerability of such plans. In this kind of environment, he said, assets such as Bitcoin and gold are needed as a store of value to maintain purchasing power.
Jones, who earlier recommended a conservative 12% allocation to Bitcoin, has this time extended his support to the digital asset, but he did not mention a particular percentage allocation this time. Having made the sentiment that Bitcoin is more volatile than gold, he recommended that portfolio allocations be made with that understanding.
It is likely your best portfolio to combat inflation, said Jones, who once again proved his belief that a combination of digital and traditional safe-haven assets is the most effective protection.
In the future, Jones opined that if President Trump were to get a second term in office, there was a possibility of seeing an “uber-dovish” Federal Reserve chair replace Jerome Powell, which he indicated would probably add more pressure to inflation.
Jones provided the comments after the publication of U.S. Consumer Price Index (CPI) figures on May, which indicated an increase in inflation by 2.4% on a year-over-year basis, just below expectations of analysts but representing continued cost pressures.
