A finance professor at the Wharton School of the University of Pennsylvania has warned about inflation and the Fed hiking rates many more times than the market expects. He also said that bitcoin has become the new gold for the millennials.
Professor of Finance on Bitcoin and Inflation
Wharton finance professor Jeremy Siegel shared his outlook for various markets he thinks investors should be exposed to this year in an interview with CNBC on Friday.
Siegel is Russell E. Palmer Professor Emeritus of Finance at Wharton School, University of Pennsylvania. His research focuses on demographics, financial markets, long-run asset returns, and macroeconomics.
He was asked about gold and commodities as future investments. Noting that gold “has been disappointing”, he stressed that “it is a fact that the younger generation regards bitcoin as the substitute” for gold. The professor estimated:
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.
“Seniors remember the 1970s,” he continued. “This time of inflation, gold has skyrocketed. This time it’s not in favor,” he noted.
Professor Siegel also believes that investors should have exposure to commodities, which he said could be done by investing in emerging markets, which are commodity-sensitive.
The finance professor then discussed inflation, which he has voiced concerns about on several occasions. “I’ve been saying this for a long time. I have been warning about inflation for a year and a half, ”he stressed.
“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:
The Fed is going to have to increase a lot more times than the market expects.
