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Arthur Hayes Says 1930s-Style Debasement Is Aimed at Crushing Savers and Inflating Bitcoin and the Stock Market
BitMEX co-founder Arthur Hayes believes the upcoming debasement of fiat currency will drive Bitcoin prices higher (Bitcoin) and stocks.
In a new analysis, the crypto veteran says he is confident the economy is in a new inflationary cycle and BTC will “get its mojo back.”
Hayes cites projections from the Congressional Budget Office (CBO), which estimates that the U.S. federal budget deficit for fiscal year 2024 will be $1.9 trillion, the highest amount on record outside of COVID-19 years.
Explain Hayes,
“There will be no recession. That doesn’t mean that a large portion of the population won’t be in dire financial straits, but the Pax Americana will continue to move forward regardless.
I point this out because I believe that fiscal and monetary conditions are loose and will continue to be loose, and therefore holding cryptocurrencies is the best way to preserve wealth. I am convinced that the current period will rhyme with the 1930s to 1970s, and that means that since I can still freely switch between fiat and cryptocurrencies, I should do so because the debasement due to the expansion and centralization of credit allocation by the banking system is underway.
The BitMEX co-founder also believes companies will inflate their own stocks using cheap credit.
“Central banks created bank reserves by buying bonds, which reduced the cost and increased the amount of credit. In private capital markets, credit was allocated to maximize shareholder returns. The easiest way to raise stock prices is to reduce the float by doing share buybacks. Companies that can access cheap credit borrow money and buy back their shares.”
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