Author: Anthony Pompliano, Founder and CEO of Professional Capital Management; Translated by: Shaw Golden Finance
This week, financial legends appeared one after another. They gave interviews everywhere, but the message they conveyed was very clear - The US financial market is in a bull market.
First, we saw Paul Tudor Jones on CNBC saying that he felt like it was 1999. "If it looks like a duck and quacks like a duck, it's probably not a chicken." This quote from Paul Tudor Jones is incredible. And he's right. So, how does the famous investor think investors should position themselves to benefit from this wave of inflation? Gold, Bitcoin, the Nasdaq, and retail stocks. Paul Tudor Jones isn't the only one who's bullish, though. JPMorgan Chase's Jamie Dimon also told Bloomberg that we are in a bull market. It's reassuring to hear the head of the world's largest bank express no concern about a recession. Dimon has access to more information than almost anyone in the world. However, he did express concern about inflation, which appears to be a greater concern for global investors given the recent rise in gold and Bitcoin prices. Another investing legend, Ray Dalio, said this week that he believes gold should account for around 15% of a portfolio. These sophisticated investors aren't talking about gold because they believe inflation will remain low. In fact, prediction market Polymarket shows an 85% chance of inflation exceeding 3%. But I'd still go so far as to say that inflation is far less of a problem than these "legends" predict. In fact, I believe inflation concerns are greatly exaggerated. Using the same Polymarket data, you can see that the market actually predicts that inflation in 2025 will ultimately be between 3% and 3.2%. Because Truflation has real-time infrastructure, I prefer it to understand inflation. Currently, Truflation shows an inflation rate of 2.2%. This is a significant drop from the 3%+ figure Truflation gave at the beginning of the year. But in my view, inflation isn't the chart to watch. It completely distracts from the real situation. Strive's Jeff Walton succinctly points out the divergence between the Consumer Price Index (CPI) and the broad money supply (M2). He said, "Over the past 20 years, the M2 money supply has grown 2.5 times faster than the CPI." So, which metric are you more worried about? The manipulated, slowly growing CPI or the parabolic rise in the M2 money supply? Clearly, the latter is the more worrying issue. The dollar's devaluation isn't due to inflation, but rather to the government's inability to stop printing money. Nothing of value has an infinite supply. So as long as the government keeps printing money, Bitcoin and gold will continue to soar.
Gold bulls are celebrating its recent outperformance relative to Bitcoin. I believe Bitcoin is poised for a major breakout in Q4, and I wouldn't be surprised if it surpasses precious metals in annual returns by the end of 2025.
But regardless of relative performance, gold and Bitcoin, two assets embodying the principles of sound money, are working together to accomplish what central banks have failed to do – protect people's purchasing power.
We should all be grateful that we have both options.
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