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Michael Burry: Governments will start suppressing gold and bitcoin

Governments will drive inflation and start suppressing gold and bitcoin as competitors. This point of view was presented by investor Michael Burry, who predicted the collapse of the US mortgage market.

In the thread, the financier, who became the protagonist of the protagonist in the film “Shorting,” predicted an increase in government incentives to overcome the crisis due to the COVID-19 pandemic.

Burry estimates that before generating $ 1 of GDP, it was necessary to borrow $ 3. Now this ratio has worsened. He drew a parallel with 1920s Germany that exemplifies the consequences of actively issuing unsecured money. Burry noted the similarity of the current situation with the one that was on the eve of the surge in inflation in the United States in the 1970s.

In some posts, Burry substantiated his point of view with graphs. On them, he showed how the US government, guided by modern monetary theory, goes to increase the money supply. This decision comes amid a recovery in retail sales and PMIs. The financier believes that trillions of dollars in new stimulus will fuel consumer demand and spike production costs.

He also touched upon Burrie on the topic of bubbles in financial markets. In his opinion, they are manifested not only in such traditional metrics as Put / Call Ratio or the level of margin lending, but also in a new phenomenon – the activity of traders on Reddit.

The investor does not believe in bitcoin, because he believes that its scale is not enough to meet the needs of the global economy. He gave the example of the Swiss franc, which is not a reserve currency, despite its high degree of reliability.

At the same time, Burry clarified that he has no dislike for Bitcoin.

 

“I believe the long-term future for a decentralized currency is fragile. Cruel, unprincipled centralized governments will not want to give up currency monopolies. In the short term, anything is possible. Therefore, I do not go short on bitcoin “, – explained the investor.

 

We will remind you, the Commissioner of the US Securities and Exchange Commission Hester Pierce doubted that there is a way to completely ban bitcoin. A similar opinion is shared by the founder of Digital Currency Group, Barry Silbert.

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