Previous Goldman Sachs Group executive Raoul Pal reveals that cryptocurrency and technology stocks are about to take off on new rallies in the near future.
In a new ask-me-anything (AMA) session, the Real Vision founder reveals that all indicates are strongly suggesting that central banks around the globe will inevitably be forced to print money, consequently boosting danger assets, most of all the cryptocurrency and tech sectors.
“All of my forward looking indicators have been suggesting that liquidity is going to keep growing, and that it will drive cryptocurrency and tech greater than anything else. And that’s basically been the story of the year so far. I think that that continues, and that’s confused many of people.
On the other hand, one trade that’s confused me is the bond trade, and thats confused many of people. Bond yields should have fallen by now, and they still haven’t. On the other hand, I think this is must do with the debt ceiling issue, which is the other confusing thing.
The debt ceiling issue has some real dangers around it, and we do not really know how to price them. All we do know is people are pretty bearish around it, and I think that’s reasonable as well, to have hedged around it, because we do not know what can happen. On the other hand, the chances are, that anything that reasons a paralysis of financial markets will lead to… more stimulus to come.”
Pal reveals that indicators tied to the G5 nations’ monetary authority balance sheets are suggesting that a new wave of liquidity is approaching financial markets. The macro guru reveals that analysts bearish on danger assets as a result of uncertain economic conditions are missing the point, because even if the economy slows down much more, central banks will still likely enhance the money supply, reports by Pal.
“So yes we can potentially have some stumbling blocks, yes we can potentially have some hurdles, but liquidity going forwards, as the economy slows down, and the central banks start increasing their activity, that will drive investment prices higher.”
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