Macro investor Luke Gromen asserts that gold and Bitcoin (BTC) are poised to be significant beneficiaries amid the deteriorating fiscal landscape of the US government.
In a recent discussion with David Lin, Gromen expressed his enthusiasm for both assets, indicating that they are “very well-positioned” to experience a surge in value as the US may need to inflate its debt away. Gromen, who is the founder and president of the macro research firm Forest For The Trees (FFTT), emphasized that the US requires negative real interest rates—where nominal inflation exceeds interest rates—to sustain its budget.
Historically, this scenario has proven favorable for gold and is likely to be advantageous for Bitcoin as well. He noted, “Gold and Bitcoin are both in a strong position during a time when the most powerful nation in the world—the most indebted nation—cannot manage its debt without maintaining negative real rates over a prolonged period.”
Gromen elaborated that this situation creates an ideal environment for gold and Bitcoin, explaining that the prices of gold in dollars have diverged from the trend of inverted US real rates. He pointed out, “We often see this in emerging markets: interest rates rise while gold appreciates in that currency. Although it has been a while since we’ve seen this in dollars, it has been occurring since 2022. The key takeaway is that gold is rising even as US real rates have increased because the US government cannot sustain positive real rates, which will have to change.”
He concluded, “I believe we are witnessing the beginning of the end for positive real rates in the US, which bodes well for both gold and Bitcoin…”
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Disclaimer: The views expressed in The Daily Hodl do not constitute investment advice. Investors should conduct their own research before engaging in high-risk investments involving Bitcoin, cryptocurrency, or digital assets. Please be aware that all transactions and trades are undertaken at your own risk, and any losses incurred are your responsibility. The Daily Hodl does not endorse the buying or selling of any cryptocurrencies or digital assets, nor does it serve as an investment advisor. Additionally, The Daily Hodl is involved in affiliate marketing.
