Former Goldman Sachs executive Raul Pal details what he believes will be two positive catalysts for crypto assets in 2024.
In a new interview on the Wealthion YouTube channel, the macro guru and CEO of Real Vision tells Anthony Scaramucci, founder of SkyBridge Capital, that upcoming stimulus in the U.S. and around the world will disrupt the digital asset industry. I say I will support you.
According to Pal, politicians tend to “hand out candy” in the form of stimulus packages during elections, which leads to higher inflation, which in turn leads to higher prices for digital assets.
“We are seeing China in economic turmoil. China is in complete debt deflation with the same problems: an aging population, high debt, everything is exploding, and Needing to earn growth to pay these interest costs, European countries are likely to eventually do more stimulus, and eventually the US will do more as well. It will give you some inspiration.
That's what lies ahead. And there's another sweet spot right in the middle. It's when politicians hand out candy during elections, and the candy everyone wants is economic stimulus. So they put out a stimulus package, but it has to be paid for and ends up on the Fed's balance sheet or some other liquidity vehicle to help the government raise money. It's either.
That means the value of our money is likely to go down. The big problem is that asset prices will rise, but our wages will not. This means we are poorer in the future because we cannot afford so many assets and are exposed to huge waves of debt that must be refinanced. This is usually a very positive background for cryptocurrencies, with lots of liquidity and liquidity driving all markets. ”
Pal went on to say that the decline in the value of fiat currencies due to inflation is akin to paying a hidden tax, as investors are stripped of their ability to purchase assets due to rising costs.
“Asset prices continue to rise because they are devaluing currencies. Devaluing a currency sounds like a complicated economic term, but basically what it means is: is taking away the power to buy assets.Since 2008, it has averaged 15% per year.
This means that your ability to purchase assets will be lost by 15% per year. So you're sitting on a pile of cash every year without buying a house, and that house is appreciating at about 15% a year. It's bananas, if you stick with cash for two years or have no savings, money becomes more and more expensive. What they're really doing here is taxing you. But by hiding it, it's like all these costs are socialized. ”
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