In an extensive CNBC interview, Billionaire hedge fund manager Paul Tudor Jones said that we are now in “uncharted territory”, since the Federal Reserve had only eased monetary policy in previous economic slowdowns and financial crises.
According to him, the environment for investors is worse than ever as the Fed is raising rates when financial conditions have already become tight.
“You can’t think of a worse environment than where we are right now for financial assets,” Jones said on CNBC’s “Squawk Box” Tuesday. “Clearly you don’t want to own bonds and stocks.”
It is expected that the Fed will announce a 50 basis point increase in its benchmark interest rate on Wednesday, in potentially futile attempt to curb 40-year inflationary highs.
Given the situation, Tudor Jones said investors should prioritise capital preservation in this difficult environment.
“I think we’re in one of those very difficult periods where simply capital preservation is I think the most important thing we can strive for,” Jones said. “I don’t know if it’s going to be one of those periods where you’re actually trying to make money.”
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‘It’s hard not to not want to be long crypto’
Asked about his thoughts on Bitcoin, Jones said there is a generational divide and that the smartest young people are going into crypto.
“I see this generational divide.. If you look at the smartest and brightest minds that are coming out of college today, so many of them are going into crypto, into the internet 3.0. It’s hard not to be long on crypto because of the intellectual capital that’s going into that space. “
Jones added that government are not big fans of this decentralised space.
“Clearly central banks are not going to necessarily be huge fans of that (decentralisation)… because they lose the ability to control the creation and the supply of money.”
Jones shot to fame after he predicted and profited from the 1987 stock market crash. In 2020, he was among the first institutional investors to endorse Bitcoin and continues to be a strong proponent of the cryptocurrency sector.
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