Taps Coogan – October 12th, 2022

Paul Tudor Jones, founder of Tudor Investment Corp and the man famous for ‘predicting’ the 1987 ‘Black Monday’ stock market crash, recently spoke to CNBC and outlined a notably dark outlook for the 2020s.

 

Some excerpts from Paul Tudor Jones:

“The (2010s) were the peak of globalization and probably the peak of central bank experimentation with monetary policy… The 2020s, I’m afraid, are going to be that period when we really focus on debt dynamics country by country, fiscal deficits, and the need to run fiscal policy… in a way that gives people confidence in the long run value of the currency. The problem we’ve had for the last 12 years is we’ve had this massive experiment with monetary policy where we suppressed yields and we did this massive experimentation on the fiscal side during the pandemic. So, my guess is the 2020s will be the opposite of both… Whoever is president in 2024 is going to be dealing with debt dynamics that are so dire that… we’re going to have to have fiscal retrenchment… The (2010s) were all about suppressing yields. I think the 2020s will be just the opposite: higher term premiums in bond markets, higher term premiums in stocks markets.”

“In a time where there is too much money, which is why we have too much inflation and too much fiscal spending, something like crypto… will have value. I don’t know when that will be…”

“We’re probably getting ready to go through the recession playbook… I don’t know if it started now, if it started two months ago… The first thing that will happen is that short rates will start going down…When we get into that recession there will be a point when the Fed stops hiking… or even at some point even reverses… and when that happens you’ll probably have a massive rally in a bunch of beaten down inflation trades.”

There is more to the discussion to enjoy it above.