Former Goldman Sachs executive Raoul Pal is detailing 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 Real Vision CEO tells SkyBridge Capital founder Anthony Scaramucci that upcoming stimulus packages in the US and around the world will boost the digital assets industry.
According to Pal, politicians tend to “hand out candy” in the form of stimulus packages during elections, which leads to higher inflation and in turn, higher prices for digital assets.
“We’re seeing China in an economic mess, they’ve got a full debt deflation going on the same issues – aging population, high debts, everything’s blowing up, they’re likely to stimulate further. The Europeans are likely to end up stimulating further, and eventually the US will stimulate more as well, because they need to get growth to pay for these interest costs.
So that is what lies ahead. And then we’ve got the other sweet spot in the middle of this, which is when politicians hand out candy during elections, and the candy that everybody wants is stimulus. So they will hand out stimulus, which needs to be paid for, it either ends up on the Fed’s balance sheet, or some other liquidity measure to allow the government to fund itself.
So what we’ve got is a high probability that our money’s gonna be worth less. Asset prices are going to rise but our wages won’t, which is the big problem. So our future selves are getting poorer because we can’t afford as many assets and we’ve got this massive wave of debt to be refinanced. That’s normally a very positive backdrop for crypto, lots of liquidity and liquidity is what drives all markets.”
Pal goes on to say that fiat currency debasement via inflation is akin to paying hidden taxes as investors are stripped of the power to purchase assets due to their rising costs.
“Asset prices keep coming up. And that’s because they’re debasing the currency. What debasing the currency is, it sounds like a complicated economics term, but what it basically means is they’re robbing you of the power to buy assets. It’s been, on average, 15% a year since 2008.
So you’re losing the ability to buy assets by 15% a year. So each year, you sit in a pile of cash, and don’t buy a house, that house is roughly going up at 15% a year. That’s bananas, you sit on cash for two years, or you don’t have any savings, it gets more and more expensive. What they’re actually doing here is taxing you. But by hiding it, it’s like a socialization of all of these costs.”
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