Paul Tudor Jones concerned U.S. is in ‘untenable fiscal position’ as it faces greatest challenges since WWII Paul Tudor Jones concerned U.S. is in ‘untenable fiscal position’ as it faces greatest challenges since WWII
In an interview with CNBC’s Squawk Box, Jones expressed bearish sentiment on U.S. equities and a preference for gold or Bitcoin at present.
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Updated: Oct. 10, 2023 at 7:43 pm UTC
National Archives at College Park - Still Pictures / Wikimedia. Remixed by CryptoSlate
Paul Tudor Jones, the billionaire hedge fund manager and founder of Tudor Investment Corporation, has voiced significant concerns about the current state of the stock market.
In an interview with CNBC’s Squawk Box, Jones drew attention to escalating geopolitical risks and a deteriorating US fiscal position:
“It’s a really challenging time to want to be an equity investor and in U.S. stocks right now. You’ve got the geopolitical uncertainty… the United States is probably in its weakest fiscal position since certainly World War II with debt-to-GDP at 122%.”
Best known for predicting the 1987 stock market crash and profiting from it, Jones said that the Israel-Hamas war has created a “challenging” geopolitical environment. This, in turn, could create a significant risk-off environment that has the potential to drastically change the market landscape in the U.S.
When pressed for alternatives, Jones expressed a preference for gold and Bitcoin together, saying:
“I think they probably take on a larger percentage of your portfolio than historically they would because we’re going to go through both a challenging political time here in the United States, and we’re going to go through — we’ve obviously got a geopolitical situation.
He noted that he would personally wait for a resolution of the ongoing conflict before jumping into risk assets again.
“From a personal standpoint, would I be investing in risk assets now and stocks until I saw what the resolution was with Israel, Iran?… Israel is going to respond in some way, shape or form. The determination of whether Iran was actually responsible is enormous because again, it has the possibility to really escalate into something terrible.”
Jones also noted that the rising interest rates in the U.S. have created a “vicious circle” where higher rates cause higher funding costs, which in turn causes higher debt issuance. This goes on to cause further bond liquidations, which causes higher rates, which then puts the U.S. in an “untenable fiscal position,” he said in the interview.
While not directly referencing cryptocurrencies, Jones’ stance hints at the potential shift of institutional investors toward diversified portfolios that might include digital assets.
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Andjela Radmilac
Armed with a classical education and an eye for news, Andjela dove head deep into the crypto industry in 2018 after spending years covering politics.
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Paul Tudor Jones II is the Founder, Co-Chairman and Chief Investment Officer of Tudor Investment Corporation.