Taps Coogan – October 21th, 2021

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Paul Tudor Jones, founder of Tudor Investment Corp and the man who famously predicted the 1987 ‘Black Monday’ stock market crash, recently spoke to CNBC to warn that persistent inflation is “the single biggest threat” to financial markets and society in general.”

Some excerpts from Paul Tudor Jones:

“I think… the number one issue facing the main street investors is inflation and it’s pretty clear to me that it’s not transitory. It’s here to stay and it’s probably the single biggest threat to certainly financial markets and just society in general. This 5.4% CPI is a real eye opener. It’s the highest CPI we’ve had in 30 years and of course it’s going to go higher here in the next few months as energy feeds through it. So for an investor… it’s absolute death for a 60-40 portfolio, for a long stock – long bond portfolio…”

“M2 (money supply) has grown $5.2 trillion since the pandemic began, that’s $3 trillion greater than it normally would have been… That’s 16% of GDP just sitting in liquid deposits that can go into stocks, or crypto, or real-estate, or be consumed, so that’s a huge amount of dry powder that’s just sitting there weighting to be utilized which is why inflation is not going to be transitory…” 

“The second big component would be the wage pressure that we’ve got… We’re at 10.4 million job offers, 7.7 million unemployed. It’s clear that we have a structural issue with our labor force that’s not going to be solved by zero percent interest rates and quantitative easing… We have a Federal Reserve Board that are inflation creators not inflation fighters…”

There is more to the interview, so enjoy it above.

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