To investors,
The legends of finance have been out in full force this week. They are giving interviews left and right, but the message is very clear — US financial markets are in a bull market.
First, we saw Paul Tudor Jones on CNBC saying he feels like we are in 1999. Take a listen here:
“If it looks like a duck and quacks like a duck, it probably isn’t a chicken.” What an incredible line from PTJ. And he isn’t wrong.
So how does the famous investor think investors should be positioned to benefit from this inflation story? Gold, bitcoin, Nasdaq and retail stocks. Here is how he explained his logic:
Paul Tudor Jones is not the only person who is bullish though. JP Morgan’s Jamie Dimon shared with Bloomberg that we are in a bull market.
It is great to hear the leader of the world’s largest bank say he isn’t worried about a recession. Dimon has access to more information than almost anyone in the world. He did however say he is worried about inflation, which is something investors around the world seem to be more concerned about given the recent rise in gold and bitcoin’s price.
Another investing legend, Ray Dalio, said this week he believes gold should be around 15% of a portfolio. Here is why he believes this is the right allocation:
These sophisticated investors are not talking about gold because they think inflation is going to be low. In fact, prediction market Polymarket shows 85% odds of inflation over 3%.
But I am going to go out on a limb and say inflation is not going to be nearly as big of a problem as these legends are predicting. In fact, I think the inflation fears are widely overblown. Using the same Polymarket data, you can see the market is really saying inflation is going to end up somewhere between 3% and 3.2% in 2025.
And Truflation, which is my preferred method for understanding inflation because of their real-time infrastructure, is showing inflation at 2.2%. This a relatively big drop from the 3%+ Truflation reading at the start of the year.
But inflation isn’t the chart to watch in my opinion. That is a complete distraction from what is really happening. Strive’s Jeff Walton nailed it when he called out the divergence between CPI and M2 money supply.
He says “M2 money supply has grown 2.5 times faster than CPI over the last 20 years.” So which of those metrics are you more worried about? The manipulated, slow-growing CPI numbers or the parabolic M2 money supply growing to the sky?
It is obvious the latter is the bigger concern. So keep this in mind when you hear Ken Griffin and others talking about the US dollar having a significant decline so far this year. Here are Griffin’s recent comments:
It isn’t inflation that is driving the dollars fall, but rather the fact the government can’t stop printing money. Nothing of value has infinite supply. So until governments stop printing money, bitcoin and gold will continue surging higher.
Gold bugs are celebrating their recent outperformance on a relative basis to bitcoin. I believe bitcoin is going to have a big Q4 and it would not surprise me if bitcoin ends 2025 with a larger annual return than the precious metal.
But regardless of relative performance, the sound money principled assets of gold and bitcoin are working together to do what central banks have failed to do — protect the purchasing power of the people.
We should all be thankful we have these two options available to us.
Have a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
How To Prepare For The Next Bitcoin Bull Market
Anthony and John Pompliano discuss why bitcoin is going higher, why Ken Griffin and Paul Tudor Jones are so bullish, how to enjoy the bull market while preparing for a storm, why the government will never stop printing money, and why asset prices are going higher.
Enjoy!
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