Macro investor here Luke Gromen says that gold and Bitcoin (BTC) are now set to be some of the main beneficiaries of the US government’s declining fiscal situation.
In a new interview with David Lin, Gromen says that gold and Bitcoin are two assets that he “likes” right now, saying they are both “very well-positioned” to rally in an environment where the US government will likely need to inflate away its debt.
Gromen, founder and president of macro research firm Forest For The Trees (FFTT), says that the US needs negative real rates, or an interest rate that is overshadowed by nominal inflation, in order to maintain its budget.
He says historically, such a scenario has been bullish for gold, and will likely be optimal for Bitcoin as well.
“I think gold and Bitcoin are both very well positioned when you’re in a regime where the most powerful nation in the world – the most indebted nation in the world, the reserve currency issuer of the world – cannot afford their debt unless real rates are negative over some sustained period of time over the cycle.
That’s a really good setup for gold, it’s a really good setup for Bitcoin and I think it’s the reason gold prices in dollars have completely separated from inverted US real rates.
Ultimately, that’s a phenomenon we see all the time in emerging markets. Rates go up and gold goes up in that currency. It’s been a long time since it’s happened in dollars, but it’s happened since 2022, and that’s the message of why gold is rising despite US real rates having risen is that the US government can’t afford positive real rates and so that will end.
So I think we’re in the early days of positive real rates in the US ending and that’s really good for gold, it’s really good for Bitcoin…”
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