Former Goldman Sachs executive Raoul Pal says crypto and technology stocks are poised to start new rallies in the near future.
In a new ask-me-anything (AMA) session, the founder of Real Vision says all signs strongly indicate that central banks around the world will inevitably be forced to print money, leaving risky assets, especially crypto and technology. , will increase. sectors.
“All my forward-looking indicators suggest that liquidity will continue to rise and that it will boost crypto and technology more than anything else. And that’s basically the story of the year so far. I think that continues, and that confuses a lot of people.
But one trade that confuses me is the bond trade, and that confuses a lot of people. Bond yields should have fallen by now, and they still haven’t. But I think this has to do with the debt ceiling issue, which is the other confusing thing.
The debt ceiling issue poses some real risks, and we don’t really know how to price them. All we know is that people are pretty bearish around it, and I think that’s fair too, to have been around it, because we don’t know what could happen. But chances are that anything that causes financial market paralysis will lead to… more stimulus to come.”
Pal says indicators linked to the balance sheets of G5 central banks suggest a new wave of liquidity is approaching financial markets. The macro guru says analysts who are bearish on risky assets because of the uncertain economic conditions are missing the point, because even if the economy slows much more, central banks will likely still increase money supply, Pal said.
“So yes, we may have some hurdles, yes we may have some hurdles, but liquidity is moving forward, as the economy slows down and central banks start ramping up activity, that will drive up asset prices.”
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