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Jeremy Siegel: Inflation and rates will rise as millennials prefer Bitcoin to Gold

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TL;DR Breakdown

  • Jeremy Siegel, a professor at the University of Pennsylvania, has said inflation will bite the US economy.
  • He also hinted that the younger generations prefer bitcoin to Gold.

Jeremy Siegel, a finance expert at the University of Pennsylvania’s Wharton School, has issued a warning on inflation. Besides, he says the Feds will raise rates more often than the economy anticipates. He also stated that cryptocurrency has emerged as a new gold for youngsters.

In a chat with CNBC on Friday, the lecturer discussed his prediction. He touched many areas that he feels investors need exposure on during the year.

Siegel is the Russell E. Palmer Associate Professor of Economics. His line of study includes demographic trends and the stock sector, and he features at the University of Pennsylvania’s Wharton School. Besides, he researches lengthy earnings and public finance.

Bitcoin as an alternative to Gold

The host questioned him on the future of Gold and minerals as businesses. He acknowledged that Gold has “become unsatisfactory.” But he said that. “It is true that the youthful demographic regards bitcoin as an alternative” for Gold. The lecturer expressed his opinion as follows:

Let’s admit it. I believe bitcoin has displaced Gold as an investment tool in several youthful traders. For youngsters, virtual currencies are now the main prize.

He went on to say, “Older folks recall the seventies. Gold skyrocketed during that inflationary period. This round, though, it would not be to Gold’s advantage,” he stated.

Siegel also thinks that venture capitalists must-own item exposure. He says it is doable by trading in item-sensitive markets.

The accounting expert then moved on to inflation. This has been a cause of worry for him in several instances. “This is something I’ve kept preaching for ages. For the past couple of months, I’ve warned against inflation,” he stated.

“The federal as well as the financial agencies, the reserve on circulation, went too overboard.” He said. “There is a load of inflation packed in them because they sit a little below the curve.” The scholar came to this conclusion:

The Fed would have to raise rates far faster than the economy anticipates.

Jeremy believes bitcoin is an inflation hedge

Bitcoin has acted as a deflationary hedge before. Partly due to the limited supply of its units. Hedges are transactions that mitigate risk. The risks include the impact of inflation on the market in this example.

“Bitcoin is still perceived as a hedge against inflation, particularly among millennial traders. It appears as a plane to stability because it has little checks.”

The economic meltdown occurred after the pandemic’s painful days. Currently, joblessness has reached near-historic lows. A crucial pointer is that inflation may rise to levels not seen since June 1982.

Yet, others doubt the notion behind Bitcoin’s value retention. They question if it can stand out upon more profound analysis.

At first, people used to refer to Bitcoin as digital Gold. They claim it is an inflation hedge. But there is no data that backs up this notion. And the link between inflation and Gold is not clear. Yet, fiat currencies have depreciated over time as Gold has kept its own. Thus, bitcoin might follow suit.

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