Economist Predicts Bitcoin and Gold Will Rise in Stagflation
Economist Peter St Onge from the Heritage Foundation think tank suggests that Bitcoin (BTC) and gold could experience significant growth in the face of economic stagnation and high inflation. St Onge believes that periods of stagflation historically benefit hard assets.
The Impact of Stagflation
Stagflation is characterized by rising inflation rates, slow economic growth, and high unemployment levels. St Onge compares the potential future pattern to the 1970s, where assets like gold saw a six-fold increase and silver rose seven-fold. He expects Bitcoin to follow suit if a second wave of stagflation occurs.
Fed’s Actions as Indicators
According to St Onge, the Federal Reserve’s actions will reveal the economic outlook. If inflation persists but the Fed begins cutting rates, it could indicate a severe recession or crisis similar to the 2008 financial crisis. This would be concerning as it suggests that the Fed is abandoning its tools to combat inflation.
Hot Take: Bitcoin and Gold Could Soar in a Severe Recession
Economist Peter St Onge predicts that if a severe recession and stagflation occur, both Bitcoin and gold could experience significant increases. Drawing comparisons to the 1970s, where gold saw a six-fold increase, St Onge believes that Bitcoin’s volatility could lead to even more substantial gains. The economist suggests that monitoring the Federal Reserve’s actions will provide insight into the economic landscape and potential outcomes for these assets.
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