Anthony “Pomp” Pompliano, founder of Morgan Creek, believes that the Federal Reserve’s attempt to control inflation will end disastrously … for the benefit of Bitcoin.
Currently, the FED is working on a annual review of its policies: it seems that the institution does not plan to raise interest rates until inflation reaches 2%. In a letter dated August 5, titled “The Magicians of the Federal Reserve,” Pompliano said the Federal Reserve’s will to increase inflation will end badly.
The founder of Morgan Creek explained that the very nature of the US economy makes it “almost impossible to manipulate with a light control”. Furthermore, the Central Bank has a poor record with inflation targeting over the years, having only “reached +/- 10% of that objective 3 of the last 10 years”.
In your opinion, therefore, it is possible that the FED exceeds its inflation target, making the economy even worse:
“If this were to happen, the Federal Reserve would accelerate inflation at the exact moment that it should keep it under control. I wish I could argue that this scenario seems completely unlikely, but I think this will happen.”
Everything except the dollar
Pompliano advised investors not to accumulate cash, as the actions of the Federal Reserve will cause a sharp devaluation of the dollar. In July, the ICE index in US dollars, which measures the performance of the US currency against its top 6 opponents, it fell 3.9%: from 97.2 to 93.3.
In particular, Pompliano said:
“My prediction is that the prices of real estate, gold, stocks and Bitcoin will grow much more than they already have. Bitcoin will be the main winner in this situation, given that it is the most volatile asset.”
United States: Rising Prices During the Pandemic
Although the official inflation rate is currently around 1%, consumer prices in the United States are already on the rise. According to a study carried out by the Office of Economic Analysis, the price of meat increased by almost 11% between February and June; especially beef, which has experienced a 20% increase.
This price increase comes at a very difficult time for millions of American citizens, as the government cut the weekly benefit of $ 600 for the unemployed on July 31, which means that more than 30 million Americans will receive from the state just $ 1,284 instead of $ 3,684.
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