Legendary hedge fund manager Paul Tudor Jones issued a dire warning on Tuesday about investing conditions for stocks given heightened geopolitical tensions and precarious US fiscal circumstances. However, he remains bullish on safe-haven assets like Bitcoin and gold.
In an interview on CNBC’s Squawk Box, the billionaire investor described the current geopolitical landscape as the most threatening he’s seen throughout his career. He also sounded alarm over mounting US debt levels.
Jones contended that as interest costs rise in the US, it creates a vicious circle of higher debt issuance, more bond selling, spiking rates, and swelling funding obligations for the government. He believes this puts the country in an extremely weak fiscal position not seen since World War 2.
Given the ominous backdrop, Jones stated, “I can’t love stocks right now” as traditional risk-on assets look unattractive. However, he reiterated his conviction in bitcoin and gold, which he sees as buffers against the turbulent climate.
The macro hedge fund manager first disclosed owning bitcoin in May 2020 after allocating 1-2% of assets to the cryptocurrency. He later revealed he wanted to boost that to 5% exposure by 2021.
While Jones turned more cautious on bitcoin this year due to tightening monetary policy, he seems to view it positively again amid tail risks related to politics, inflation, and bonds.