The Wharton School of Finance at the University of Pennsylvania warned against inflation and the Fed raising rates more often than the market anticipates. He stated that Bitcoin has been the new currency of choice for millennials.
Finance Professor talks about Bitcoin and Inflation
Wharton’s finance professor Jeremy Siegel shared his outlook for various markets that he believes investors should have exposure to this year in an interview with CNBC Friday.
Russell E. Palmer Professor Emeritus of Finance and Wharton School at University of Pennsylvania, Siegel. His research is focused on macroeconomics, demographics, asset returns and financial markets.
On the future of commodities and gold as investment options, he was questioned. Noting that gold “has been disappointing,” he stressed that “it’s a fact that the young generation is regarding bitcoin as the substitute” for gold. Professor opined that:
Let’s face the fact, I think bitcoin as an inflation hedge in the minds of many of the younger investors has replaced gold … Digital coins are the new gold for the millennials.
“Old people remember the 1970s,” he continued. “That inflation time, gold soared. This time it is not in favor,” he noted.
Professor Siegel believes investors must have access to commodities. He suggested that this could be achieved by investing in emerging markets which are sensitive to commodity prices.
Professor of finance then spoke about inflation. He has expressed concern over it on numerous occasions. “I’ve been saying this for a long time. I’ve been warning about inflation for a year and a half,” he emphasized.
“The Fed and the fiscal authorities so way overdid it, particularly the Fed on liquidity,” he described. “They are so far behind the curve that we have a lot of inflation that is embedded in.” The professor concluded:
Market expectations will dictate that the Fed must raise its rates more often than it is comfortable with.
What do you think about the finance professor’s inflation warning and his comment about bitcoin and gold? Please comment below.
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