Paul Tudor Jones: 'All Roads Lead to Inflation'; He's Long Bitcoin and Gold

Billionaire hedge fund manager Paul Tudor Jones believes the U.S. will need to inflate its way out of its growing debt burden, recommending investments in assets like Bitcoin, gold, and commodities rather than bonds. In a recent interview with CNBC, Jones discussed the implications of the U.S.'s ballooning national debt and the challenges that lie ahead, regardless of the outcome of the upcoming presidential election.

Inflation as the Inevitable Outcome

With the U.S. debt now approaching 100% of GDP—up from just 40% a quarter-century ago—Jones emphasized that inflation is likely the only path forward. "All roads lead to inflation," he said, highlighting his preference for gold and Bitcoin while shorting fixed income, particularly long-term bonds.

His comments align with those of other prominent figures, including Federal Reserve Chair Jerome Powell, who has also warned about the unsustainable levels of U.S. debt. Legendary investor Stanley Druckenmiller recently disclosed that he, too, is betting against U.S. government bonds.

A Critical Moment in History

Jones described the current fiscal situation as an "incredible moment in history" and warned that the U.S. could face serious financial trouble unless it addresses its spending issues. He noted that promises of increased spending and tax cuts from both Harris and Trump would only exacerbate the situation. "We are going to be broke really quick unless we get serious about dealing with our spending issues," he added.

The only viable strategy to manage the debt burden, according to Jones, is to inflate and outgrow it. This would involve the Federal Reserve keeping nominal interest rates below inflation while supporting nominal economic growth above inflation.

Investment Recommendations

Given this outlook, Jones recommended holding a diversified basket of assets to hedge against inflation. Specifically, he suggested investing in gold, Bitcoin, commodities, and Nasdaq stocks, while avoiding fixed income altogether.