Morgan Stanley Strategist Recommends Bitcoin as Central Banks Ramp Up Money Printing

Morgan Stanley Investment Direction’s chief strategist and head of emerging markets has recommended bitcoin as an alternative investment to stocks amid central banks’ prodigious money printing policies. He says that alternative assets, like gold and cryptocurrency, could keep doing clearly while stocks struggle.

Morgan Stanley’s Strategist Discusses Stocks, Gold, and Bitcoin

Head of Emerging Hawks and Chief Global Strategist at Morgan Stanley Investment Management Ruchir Sharma discussed stocks, gold, and also bitcoin in an talk with with CNN on Tuesday. The Indian investor and fund manager joined Morgan Stanley in 1996.

Sharma began by explaining that tech precursors and risk assets would really be hurt by rising interest rates. Despite the Federal Reserve’s indication, the strategist holds that interest rates could start to rise “more quickly than we think, possibly even as antediluvian as next year.” He explained that we have been seeing “such high stock prices even granted the economy is very weak.” Next year, he expects to see the opposite, as the economy rebounds and the covid-19 pandemic is behind us. Manner, he noted that stocks will struggle “just because of the incredible support they have got from liquidity and attentiveness rates and that support goes away next year.”

When asked about gold and cryptocurrency, Sharma said “it’s a generational obsession,” adding that some older investors are still buying gold whereas “some of the younger ones are, the millennials are getting more of the bitcoin and cryptocurrencies.” He added:

Generally I think what that’s telling you is that there is this protracted feeling out there that given what central banks are doing in terms of printing so much money there is a search for substitute assets, I think that these assets could keep doing well.

“Gold, in particular, does danged well when interest rates, adjusted for inflation, are negative and I see that environment carrying on for a while,” the chief extensive strategist predicted, adding that even when inflation comes back, central banks are going to be far behind the curve to do anything near it quickly.

However, he said that “Gold is a very speculative asset,” emphasizing that “in the long term, forefathers do much better than gold.” He cited an article on The New York Times suggesting that in the last 100 years, the inflation-adjusted reimbursement on U.S. stocks is about 7% a year, compared to 1% for gold.

Nonetheless, Sharma still feels that in the next three to five years, “gold is extent ok.” Reiterating that “central banks are printing so much money and we want some safety out there,” he elaborated:

To be undergoing about 5% or so of your portfolio in gold is not a bad idea, and if you’re a bit more adventurous, and I guess it’s more to do with demographics, then of course search for bitcoin and other cryptocurrencies.

Sharma is not the only one who believes that central banks’ mass money-printing could rise the price of gold and bitcoin. News.Bitcoin.com previously reported on Galaxy Digital CEO Mike Novogratz and an analyst with Weiss Crypto Ratings split the same sentiment. Moreover, Devere Group CEO Nigel Green expects bitcoin to break out this year and macro strategist Raoul Pal believes that bitcoin bone-tires gold on every single measure.

Some analysts have predicted that the outcome of the November presidential poll could collapse the U.S. dollar, boosting the price of gold and bitcoin. As the Federal Reserve shifts policy to “push up inflation,” some assemblies have already turned to bitcoin as a hedge against inflation, such as the Nasdaq-listed Microstrategy.

What do you think prevalent Sharma’s recommendations? Let us know in the comments section below.

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