With high spending, big deficits and no end-date in sight for the coronavirus outbreak that has swept the world, analysts are weighing in on the likelihood of a financial tsunami – led by epic inflation. With central banks printing millions, billions and trillions to keep today’s markets afloat, tomorrow’s purchasing power hangs in the balance.
Appearing on CNBC’s Squawk Box, billionaire Thomas Peterffy, chairman of Interactive Brokers, the world’s largest electronic broker, thinks there’s plenty of reason to believe that investors, with seemingly no place to run, will turn to traditional markets to navigate the incoming financial crisis – even though the fundamentals look lousy.
Bitcoin, however, despite its ongoing volatility and high risk, topped last year’s list as the best-performing asset and took top honors for the decade, beating high-performing stocks and other asset classes. Bitcoin is also up roughly 27% from $7,234 at the start of the year while the Dow Jones Industrial Average is struggling to show a return in 2020 after plummeting to a yearly low of 18,591 in March.
“By the end of the year, the Fed will have pumped into the economy maybe $10 trillion. And that money is going to stay there and slush around, and it will cause a lot of inflation. And there are people who seriously believe that stocks are a safe haven. And that’s a good reason to buy. That’s a good reason to buy stocks.
But, on the other end, you really can’t disregard the fundamentals which are very, very, very weak…
Eventually there will be a high rate of inflation in the years to come, and at that time, stocks will be a good place to hide.”
"You can't disregard the fundamentals which are very, very, very weak," says Thomas Peterffy. "All the weakness will still have to surface, eventually there will be a high rate of inflation in the years to come and at that time stocks will be a good place to hide." pic.twitter.com/DQAxTzBkru
— Squawk Box (@SquawkCNBC) June 12, 2020
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