Tudor Fund founder, billionaire, and legendary investor Paul Tudor Jones purchased gold and Bitcoin as a hedge against inflation risks before the election.
Jones stated that the U.S. government's debt has grown from 40% of GDP to nearly 100% over the past twenty-five years, seemingly on an unsustainable trajectory. Consequently, he is avoiding fixed income and shorting long-term U.S. Treasury bonds.
"All roads lead to inflation. I am bullish on gold, bullish on Bitcoin, and I think commodities are severely undervalued, so I am also bullish on commodities. I believe many young people are seeking inflation hedges through the NASDAQ, which has also performed very well."
Jones is not the only billionaire investor sounding the fiscal alarm; Stanley Druckenmiller also indicated earlier this month that he is shorting bonds. Druckenmiller stated that the "fiscal recklessness" of both parties is imminent.
Jones said he has rebalanced his portfolio to include more inflation trades.
On Monday, the U.S. 10-year Treasury note rose by 11 basis points, and today it increased by 2 basis points to 4.232%.
Failing to address the inflation issue could trigger protests in the bond market.
Jones believes that both candidates are concerning because neither seems to be taking the country's burgeoning debt seriously.
If the next president does not adjust policies to address the rising debt-to-GDP ratio in the United States, "the solution to getting out of this situation is inflation."Jones added that this would include increasing the consumption tax and lowering interest rates as much as possible. According to the Congressional Budget Office's forecast, by 2034, the U.S. debt-to-GDP ratio will reach 122%, but Jones holds a strongly pessimistic view of the U.S. fiscal trajectory, believing that this is a very conservative estimate.
Jones believes that the next president must address the issue of huge deficits, otherwise, they will face protests from the bond market. "Bond vigilantes" have already made a big fuss about this last year, refusing to buy U.S. debt, which led to the 10-year Treasury yield reaching 5% last October.