Raoul Pal, the macro guru and CEO of Real Vision, recently shared his insights on the future of gold and cryptocurrencies in a podcast interview with Anthony Scaramucci on the Wealthion YouTube channel. Pal believes that while gold is set to see a rally in prices, its growth potential may be overshadowed by that of digital assets.
Drawing parallels between gold and crypto, Pal highlights that both are influenced by monetary debasement, a trend he doesn’t see disappearing anytime soon. The massive interest accrued on the US debt indicates a continuous cycle of currency devaluation, which is expected to drive the price of gold higher. However, Pal expresses a preference for cryptocurrencies over gold, citing their higher risk-adjusted returns and beta.
In Pal’s view, the ongoing debasement of currency could potentially render recessions obsolete. He argues that a recession is typically triggered by credit events, where the value of collateral decreases significantly in relation to debts. By devaluing the currency, the impact on collateral is mitigated, thereby preventing the onset of a recession. Pal goes on to suggest that the recession experienced in 2020 may not have occurred if not for the Covid-19 pandemic.
As Pal delves into the dynamics of monetary policy and its impact on economic cycles, he emphasizes the evolving landscape of financial markets. With his unique perspective on the interplay between traditional assets like gold and emerging digital assets like cryptocurrencies, Pal provides valuable insights for investors navigating the complexities of today’s economic environment.
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