• 319 days Could Crypto Overtake Traditional Investment?
  • 323 days Americans Still Quitting Jobs At Record Pace
  • 325 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 328 days Is The Dollar Too Strong?
  • 329 days Big Tech Disappoints Investors on Earnings Calls
  • 330 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 331 days China Is Quietly Trying To Distance Itself From Russia
  • 332 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 336 days Crypto Investors Won Big In 2021
  • 336 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 337 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 339 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 339 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 343 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 343 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 343 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 346 days Are NFTs About To Take Over Gaming?
  • 346 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 349 days What’s Causing Inflation In The United States?
  • 350 days Intel Joins Russian Exodus as Chip Shortage Digs In
The Countries With The Largest Diamond Reserves

The Countries With The Largest Diamond Reserves

Diamonds reserves in Russia, Congo…

Lunar Mining May Commence As Early As 2025

Lunar Mining May Commence As Early As 2025

Plans to start mining the Moon as…

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