• 2 hours Newmont Mining Teases Investors With Special Dividend
  • 5 hours Central Banks Double Down On Gold
  • 7 hours Don't Write Off Cryptocurrencies Just Yet
  • 23 hours Trade In Counterfeit Goods Hits Half A Trillion Dollars
  • 1 day Tesla Struggles To Compete In European Market
  • 2 days China: The New King Of Caviar
  • 2 days Gold Mid-Tiers Rally On Fresh Earnings Reports
  • 3 days Can The British Pound Overcome Brexit?
  • 3 days Is A Gold Breakout Near?
  • 4 days Federal Reserve Downgrades U.S. Growth And Cuts Rate Hikes
  • 4 days Disney Beats Out Comcast In $71.3B Mega-Merger
  • 4 days The Feds Continue To Prop Up Equities Markets
  • 4 days Bejing's Sway In South China Sea Is Fading
  • 5 days Saudis Eye Billions As Stocks Get Emerging Market Boost
  • 5 days Airbnb In Acquisition Mode Ahead Of IPO
  • 5 days Gold Hangs At $1,300 Ahead Of Fed Meeting
  • 5 days Champagne Sales Slow As European Economic Worries Grow Louder
  • 6 days Putin Signs “Digital Iron Curtain” Into Law
  • 6 days Russian Metals Magnate Sues U.S. Over Sanctions
  • 6 days Tesla Looks To Jump Into Indian Market
Jan Bauer

Jan Bauer

Staff Writer, Safehaven.com

Jan is a writer for Safehaven.com She has 15+ years experience in FX trading and focuses on crypto currencies, FX, gold and silver investments

Contact Author

  1. Home
  2. Commodities
  3. Other

Billionaire Investor Bails On Stocks, Favors Cold Hard Cash

cash

Stocks are basically toxic right now, and the only things worth holding are commodities and hard assets—or just cash—legendary hedge fund manager Paul Tudor Jones told Goldman Sachs, amid a major market sell-off that saw the Dow plunge another 420 points at close on Thursday.

In early morning trading Friday, things were looking even worse in the wake of Trump’s announcement that he plans to unveil hefty tariffs on imported steel and aluminum next week, despite what economists say will be a severely negative backlash for the economy.

No one’s even thinking of steel in this equation: the fear is of the broader implications of a protectionist world for multinational companies—and Jones’ negative stock sentiments came before the tariff issue send the market spiraling downward, again.

Speaking to Goldman, Tudor Jones placed the blame on what investors fear most right now: inflation.

“We’re setting the stage for accelerating inflation, just as we did in the late ‘60s,” Jones said, blaming the corporate tax cut and Congress’ budget spending bill. The combination of the two will mean a budget deficit of 5 percent of GDP, Jones said, calling it “unprecedented in peace time outside of recession”.

Unless we’re funding a war like Vietnam, this isn’t how things should go, the hedge fund legend told Goldman, predicting a rise in inflation that should have stock investors running for the hills.

Jones said he would only buy stocks when the deficit is 2 percent, not 5 percent, and when real short-term rates are not negative.

Instead, he wants to own commodities, hard assets, and cash.

Related: The Fascinating Interplay Between Gold And The U.S. Dollar

And as both bulls and bears are losing big on stocks, hard assets are looking increasingly attractive.

And new Fed Chairman Jerome Powell has his work cut out for him. Jones likened him to General George Custer in the run-up to the Battle of Little Bighorn, “looking down on an array of menacing warriors”.

“On the left side of the battlefield are the stocks—the S&P 500s, the Russells, and the NASDAQs—which have grown, relative to the economy, to their largest point not just in US history, but in world history. … Look to the middle and there awaits the army of Corporate Credit, which is also larger than ever relative to the economy … and then on the right are the Foreign Currency Fighters, along with the Crypto Tribe … All of these forces have been drawn to the battlefield because of our policy experiment with sustained negative real rates. So Powell looks behind him to retreat. But standing there is none other than Inflation Nation, led by the fiercest warmongers of them all: the Commodities.”

By Jan Bauer for Safehaven.com 

More Top Reads From Safehaven.com:

Back to homepage

Leave a comment

Leave a comment