CoinDesk Report:
Macro investor Luke Gromen stated that gold and Bitcoin (BTC) will now become one of the main beneficiaries of the deteriorating fiscal condition of the US government.
During a recent interview with David Lin, Gromen expressed his preference for gold and Bitcoin, stating that they are both “in a very favorable position” in an environment where the US government may need to eliminate debt through inflation.
Luke Gromen, the founder and president of macro research firm Forest For The Trees (FFTT), stated that the US needs to have negative real interest rates, or rates masked by nominal inflation, in order to sustain its budget.
He said that historically, this situation has been favorable for gold and is possibly the best choice for Bitcoin as well.
“I think when you are in a position of the most powerful country in the world – the most indebted country in the world, the reserve currency issuing country – with a regime that cannot afford positive real rates, both gold and Bitcoin are in a very favorable position unless we have a sustained period of negative real rates within the cycle.
This is a very good setup for gold and for Bitcoin, and I think this is why we are seeing the complete decoupling of the US dollar gold price from US real rates.
Ultimately, this is something we often see in emerging markets. In terms of currency pricing, rates go up, gold goes up. It has been happening for a while in terms of the US dollar, but it has happened since 2022, which is why despite US real rates going up, gold is still going up, showing that the US government cannot afford positive real rates, and therefore, this situation will come to an end.
So, I think we are in the early stages of positive real rates in the US, which is very good for gold and Bitcoin…”
Don’t miss any beats. Subscribe to receive email alerts directly to your inbox.
Check out price action.
Follow us on Twitter, Facebook, and Telegram.
Surf the Daily Hodl mix.
