The chief executive of the crypto asset management firm Pantera Capital says the Federal Reserve is making a major monetary mistake.
In a new interview with Raoul Pal, billionaire Dan Morehead says the Fed is embroiled in policy error after policy error, rapidly debasing the US dollar in the process.
“I think the Fed really made a couple huge policy mistakes in 2020 and 2021. There was a time where inflation was 8% and the Fed funds rate was zero. That’s called a policy error. And decreasing rates right now when everything’s booming, record everything, record fiscal deficits.
The monetary system is supposed to be the check and balance. It should be the thing that’s balancing excessive fiscal spending. And I just don’t see that. And it really is wild that the Fed is currently cutting. They’re forecasting much more cuts. If anything, they should be hiking.”
Morehead says soaring asset prices in the so-called “everything bubble” are due to the plummeting value of fiat currency rather than appreciation.
“Debasing your fiat currency against everybody else’s fiat currency is a race to the bottom. We can’t all debase against each other. That is the problem. And I think that’s why anything with a fixed quantity is surging up in price relative to the value of paper money…
Everyone’s like, ‘Oh, it’s really wild. Gold’s at a record and the S&P is at a record.’ No, they’re all kind of the same in a relativistic sense. They’re not doing anything. It’s the price of paper money that’s plummeting. And that’s why I think that the US’s policy of ‘let’s just debase our currency until we decide to make iPhones in Georgia or something.’ I don’t know if that’s going to work.”
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