Tudor Jones sees a inventory pop beginning in 2021 by suggestion, and later stress from the Biden tax plan
Paul Tudor Jones
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Billionaire hedge fund manager Paul Tudor Jones joined CNBC’s “Squawk Box” Thursday morning to discuss its market outlook in the weeks leading up to the major US elections.
Jones, one of Wall Street’s most successful hedge fund managers, is the founder and chief investment officer of Tudor Investment Corporation. He first came to prominence after predicting and profiting from the 1987 stock market crash, but has cemented his place as a top macro investor for decades.
Earlier this year, Jones told CNBC that he had invested a small portion of his portfolio in Bitcoin in cryptocurrency to hedge against inflation. Modern state-backed currencies like the US dollar, he argued, will almost always depreciate over time and can be secured by stores of value like gold.
Currency devaluation, however, can accelerate if governments are forced to borrow more and central banks use monetary policy for juice prices and economic performance. This may be the case in the US, where lawmakers and the Federal Reserve have worked together throughout 2020 to boost an economy suffering from the coronavirus.
Although many economists say the federal government’s efforts helped avoid a more severe recession, historic relief laws like the CARES bill pushed the U.S. deficit to a new record in fiscal 2020.
The final balance sheet for fiscal 2020 deficit was $ 3.13 trillion, more than three times the 2019 deficit of $ 984 billion and double the previous record of $ 1.4 trillion a year 2009, the finance department reported on Friday.
The dollar index, which indicates the strength of the greenback against a foreign currency basket, was last traded at 92.88, well below the level north of 96 at the beginning of 2020.
However, according to Jones in May, Bitcoin is not subject to the effects of government spending or central bank policies, making it a potential hedge against a sudden spike in inflation.
“Conversely, if you take cash and think from a purchasing power standpoint that if you have cash around the world today, you know that your central bank has a stated goal of depreciating its value by 2% a year.” Jones said on May 11th. “So you essentially have a wasteful asset on your hands.”
Jones has also focused his current efforts on finding companies that prioritize their social and environmental impact.
He chairs JUST Capital, a nonprofit that collects, analyzes, and evaluates data on US public companies based on metrics such as employee wage differentials, customer relationships, and climate impact.
Jones believes that investing in companies that want to reduce their environmental impact and adopt good governance, attitudes and equality practices is a smart way to allocate money over the long term.
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