Is Inflation on the Horizon Legendary Investor Shorting US Bonds Going Long on Gold and Bitcoin

Coin World News report:
Paul Tudor Jones, founder of Tudor Fund, billionaire, and legendary investor, has purchased gold and Bitcoin to hedge against inflation risks ahead of the election.
On Tuesday, October 22, Jones told CNBC that regardless of whether Trump or Harris wins the presidential election, US inflation will rise. Both presidential candidates are making “crazy” promises of tax cuts and increased fiscal spending, turning a blind eye to the US deficit problem. If this problem is not resolved, the US will need to rely on inflation to escape from debt.
Jones stated that the US government’s debt has grown from 40% of GDP to nearly 100% in the past 25 years and seems to be on an unsustainable trajectory. Therefore, he is avoiding fixed income and shorting long-term US bonds.
“All roads lead to inflation. I am bullish on gold, bullish on Bitcoin, and I believe that commodities are severely undervalued, so I am also bullish on commodities. I think many young people are seeking inflation hedges through Nasdaq, and it has performed well,” said Jones.
Jones is not the only billionaire investor sounding the alarm on the economy. Stanley Druckenmiller also stated earlier this month that he is shorting bonds. Druckenmiller believes that both parties’ “reckless fiscal” behavior is about to appear.
However, economists predict that if Trump wins, the US inflation problem will worsen because Trump plans to significantly increase tariffs and continue the corporate tax cuts of 2017. Jones stated that he has adjusted his investment portfolio to include more inflation trades because he believes that Trump may win.
Recently, strong economic data in the US has raised the risk of an economic “landing” and, coupled with increased market expectations of a Trump victory, US bond yields have risen rapidly.
On Monday, the US 10-year Treasury yield rose by 11 basis points, and today it increased by 2 basis points to 4.232%.


Failure to address the inflation problem may trigger protests in the bond market.
Jones believes that both candidates are concerning because they seem to not take the country’s ever-expanding debt seriously. Regarding the US budget, Trump and Harris are both “the least suitable for the job.”
“If the next president does not adjust policies to deal with the rising debt-to-GDP ratio in the US, the solution to this situation will be inflation,” said Jones.
Jones added that this would include raising consumption taxes and lowering interest rates as much as possible.
According to the Congressional Budget Office’s forecast, by 2034, US debt will reach 122% of GDP. However, Jones holds a strongly pessimistic view of the US fiscal trajectory and believes that this is just a very conservative estimate.
Jones believes that the next president must address the issue of massive deficits, or else face protests in the bond market. “Bond vigilantes” have already taken action last year, refusing to buy US bonds, causing the 10-year Treasury yield to reach 5% in October last year.
“Under Trump’s administration, the deficit increases by $500 billion every year, and under Harris’ plan, it increases by another $600 billion every year. I feel that all of this is wishful thinking, and the bond market will not tolerate this situation.”