Seasoned macro investor Luke Gromen believes tens of trillions of dollars will flow from the US bond market into Bitcoin (BTC), gold and stocks.
In a new interview with Kitco NEWS, Gromen says he sees liquidity draining from the $130 trillion bond market.
Central banks around the world are afraid to stockpile US Treasuries after seeing how the government could arbitrarily seize a country's assets, macro gurus said.
“Treasuries are no longer risk-free instruments for central banks. If you do something that the United States government doesn't like, they'll take your Treasury bonds and that's it. They did this to Russia. They did this to others."
As for other Treasury investors, Gromen believes they will eventually sell their holdings because gold, bitcoin and stocks have more upside potential than bonds. He emphasizes that the US government can no longer afford to raise interest rates due to its massive debt burden, making other asset classes more attractive to investors.
“The $130 trillion bond market is the underdog at the card table, and it will know it. When he figures it out, he's going to sell the bonds [and] buy me something that has value. This is something that has a value of $65 trillion in US stocks right now, $14 trillion in gold right now [and] $1.4 trillion in Bitcoin right now.
This process will continue until bond sales become so high that it causes Treasury dysfunction or pushes rates to the point where the US government cannot afford its debt load, and then the Fed and Treasury [Department] will come and print more money to limit this, which will only lead to gold, bitcoin [and] stocks.
The incentive is for what's left in the $130 trillion bond market to get into other assets faster - rinse, rinse, repeat... Things can really run out of steam very quickly.”
More interesting news - subscribe
