Crypto a Solid Hedge to “European Mess”, Raoul Pal Says
In a series of Tweets, macro guru and Real Vision CEO Raoul Pal hails cryptocurrency as one of the hotter opportunities amidst global macroeconomic affairs.
Pal explains to his 901,000 followers that recent surges in food and energy prices around the world, combined with decreased liquidity after imposed sanctions on Russia are showing an effect on the global economy.
The odds of rate hikes are falling fast because hiking rates into a supply shock just exacerbates what is likely to become a global recession as the Russia situation will not get solved fast. Demand will erode fast at these prices too.
— Raoul Pal (@RaoulGMI) March 4, 2022
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The former Goldman Sachs Executive notes that Europe is in an extremely difficult position, one in which stimulus packages and complete economic overhaul cannot be ruled out:
“Europe is now in a hot mess. I think there is a decent chance of MMT style handouts to cover food and energy costs. This could be a global thing. It was the new trick that the governments and CB’s learned in 2020. How else do they deal with the obliteration of household finances?”
Therefore, with all these macroeconomic conditions playing a significant role, Pal advises that precious metals, digital assets, bonds and the US dollar are currently the best hedge as he notes a resemblance of current climate with that of March 2020.
“The right trades here remain gold and crypto (no one’s liability), bonds and dollars. One sniff of a change in CB’s use of balance sheet and crypto explodes again but patience required. The entire set up is very similar to March 2020 for crypto. Let’s see if it makes a new low”
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Source: igaming
