- Paul Tudor Jones rang the inflation alarm in an interview this week.
- The billionaire trader touted crypto as a better hedge against rising prices than gold.
- Jones cautioned that stocks could fall if the Fed tightens its monetary policy.
Paul Tudor Jones urged the Federal Reserve to tackle rising prices, trumpeted cryptocurrency as a better inflation hedge than gold, and suggested the Chinese government's recent crackdowns are hurting its economy in a CNBC interview this week.
The billionaire trader and founder of Tudor Investment Corporation also warned inflation is the greatest danger to investors right now, and cautioned stocks could fall if the Fed cools the economy.
Here are the 8 best quotes from the interview, lightly edited and condensed for clarity:
1. "The number one issue facing the man on the street, as well as investors, is inflation. It's probably the single biggest threat to financial markets and society in general."
2. "There is $3.5 trillion just sitting in liquid deposits that could go into stocks, or crypto, or real estate, or be consumed. That's a huge amount of dry powder, which is why inflation's not going to be transitory."
3. "We have a Federal Reserve board that are inflation creators, not inflation fighters. That is a huge, huge deal."
4. "We have maybe the most inappropriate monetary policy that we've seen in my lifetime. We are adding stimulus, we are still quantitative easing when we should be doing the exact opposite. We're treating inflation with this cavalier attitude when we shouldn't be. We're ignoring it because we haven't seen it in four decades."
5. "The inflation genie is out of the bottle. If we don't immediately shift to attack it, we run the risk of getting back into the '70s, where it was the single most important issue for multiple presidents, multiple Fed chairmen. It was pernicious and persistent."
6. "If we actually begin to address the most important and most pressing problem we have, the dual mandate, we're going to get a P/E compression. The stock market's not gonna go up as fast, and may go down." - advising investors to be careful if the Fed moves to reduce inflation, as it would lower equity valuations.
7. "We're moving into an increasingly digitized world. Clearly there's a place for crypto, and it's winning the race against gold. Crypto would be my preferred inflation hedge over gold at the moment." - Jones noted that a single-digit percentage of his portfolio is in crypto, and his fund has a small trading position.
8. "The USA is the most dominant economic power in the world because we unleash our individual entrepreneurialism and creativity. You're seeing China doing the exact opposite. That place is, economically, on a slow boat to the South Pole."