Strategist Morgan Stanley recommends Bitcoin as central banks ramp up money printing
Morgan Stanley Investment Management chief strategist and head of emerging markets recommended bitcoin as an alternative investment for stocks amid the central banks' massive money printing policies. He said that alternative assets, such as gold and cryptocurrencies, can continue to perform well while stocks struggle.
Morgan Stanley strategist discusses stocks, gold and Bitcoin
Head of Emerging Markets and Global Chief Strategy Officer at Morgan Stanley Investment Management, Ruchir Sharma discussed stocks, gold and bitcoin in an interview with CNN on Tuesday. An Indian investor and fund manager joined Morgan Stanley in 1996.
Sharma begins by explaining that technology stocks and risky assets will actually be affected by rising interest rates. Despite the Federal Reserve's indicators, the strategist believes interest rates could start to rise "faster than we thought, possibly even as early as next year." He explained that we have seen "such a high stock price despite the weak economy". Next year he is expected to see the opposite, as the economy recovers and the covid-19 pandemic is behind us. However, he noted that stocks will have trouble "just because of the incredible support they get from liquidity and interest rates and that support will disappear next year."
When asked about gold and cryptocurrencies, Sharma said "it is what belongs to the generation", adding that some of the older investors are still buying gold while "some are younger, millennials. era is buying more bitcoins and cryptocurrencies ”. He added:
In general, I think what is telling you is that there is a lingering feeling out there, given what the central banks are doing in printing too much money there should be an alternative asset search, I think These assets can continue to perform well.
"In particular, gold does very well when interest rates, adjusted for inflation, are negative and I see that environment going on for a while," the global lead strategist predicted, adding that Even if inflation does return, central banks will stay far behind the curve to do anything about it quickly.
However, he said, "Gold is a highly speculative asset," emphasizing that "in the long run, stocks do much better than gold". He cites an article in The New York Times showing that for the past 100 years, the inflation-adjusted return for US stocks has been about 7 percent a year, compared with 1 percent for gold.
However, Sharma still feels that for the next three to five years, "gold is pretty good". Recalling that "the central banks are printing too much money and we want some safety there," he further explained:
Getting around 5% of your portfolio in gold is not a bad idea and if you like to take a little more risk and I guess it has more to do with demographics, then obviously look for bitcoin and other cryptocurrencies.
Sharma is not the only one who believes that central banks' mass printing of money could drive the price of gold and bitcoin. News.Bitcoin.com previously reported on Galaxy Digital CEO Mike Novogratz and an analyst with Weiss Crypto Ratings who shared the same view. Furthermore, Group CEO Devere Nigel Green expects bitcoin to break out this year, and macro strategist Raoul Pal believes bitcoin beats gold on all measures.
Some analysts have predicted that the outcome of the November presidential election could crash the US dollar, boosting the price of gold and bitcoin. When the Federal Reserve changed its policy to "boost inflation," some companies turned to bitcoin as a hedge against inflation, such as Nasdaq-listed Microstrategy.
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