Billionaire Paul Tudor Jones: All Roads Lead to Inflation, I Support Gold and Bitcoin

“Trading Wizard” Paul Tudor Jones believes the US government’s debt and deficit problems will not go away no matter who wins the presidential election next month.

Wall Street veteran Paul Tudor Jones said he is investing in Bitcoin and other commodities, as he believes “all roads lead to inflation” after the US presidential election in November.

In an interview with CNBC on October 22, the billionaire revealed that his portfolio may include gold, Bitcoin, commodities, and tech stocks, but “rejects” bonds.

According to the Federal Reserve Bank of New York's October 15 announcement, the average inflation expectation of US consumers in the next 12 months is about 3%, while the Federal Reserve's (Fed) long-term inflation target is 2% per year.

Paul Tudor Jones said that increased US government spending and upcoming tax cuts make the Fed's inflation target almost impossible. He warned that the US will soon face a financial deficit if it does not seriously address the spending issue.

The billionaire explained that the US is in an incredible historical period, when the national debt has increased to nearly 100% of GDP, compared to only 40% 25 years ago. He emphasized that the next president, whoever it is, will have to face this problem. The promises of Ms. Kamala Harris and Mr. Donald Trump to increase spending and cut taxes will only make this situation worse.

The US Congressional Budget Office (CBO) estimates that the federal deficit in fiscal year 2024 will reach $1.9 trillion, and could even increase to $2.8 trillion by 2034.

Jones said that the only way out of this situation is through inflation and economic growth faster than the debt burden, citing Japan as an example. Accordingly, the Federal Reserve should adopt an easing policy, keeping nominal interest rates lower than inflation and supporting nominal economic growth higher than inflation.

JPMorgan's report on October 3 said that demand for gold is increasing due to geopolitical instability, concerns about persistent inflation and growing government deficits. JPMorgan analysts are optimistic that Bitcoin will have more growth momentum in 2025, and gold and Bitcoin will act as "lifebuoys" in the context of economic instability.

The massive inflows into Bitcoin ETFs in September, after a pullback in August, suggest that retail investors are also looking at Bitcoin and gold as similar hedges of value.

Bitcoin is currently trading around $67,000, up more than 50% year-to-date. Some analysts have set a price target for Bitcoin near its all-time high of $73,679.