- Paul Tudor Jones praised bitcoin and warned about rising inflation.
- The billionaire investor sounded the alarm on the "Buffett indicator" hitting record highs.
- Jones suggested retail investors could flock to commodities and send their prices skyward.
- See more stories on Insider's business page.
Billionaire investor Paul Tudor Jones trumpeted bitcoin, expressed concern about the "Buffett indicator" hitting record highs, and called on the Federal Reserve to take inflation seriously in a CNBC interview this week.
The Tudor Investment Corporation founder also raised the prospect of a retail-fueled commodity boom, recommended stricter margin limits on investors, and voiced his support for higher taxes on America's wealthiest people.
Here are Jones' 10 best quotes from the interview, lightly edited and condensed for clarity:
1. "I get nervous from a financial-instability standpoint when the stock market is 220% of GDP. I get nervous when that number is 45% higher than in the 2000 bubble, and 90% higher than at the 2007 top." – referring to Warren Buffett's namesake gauge, which compares the stock market's total value to the size of the economy.
2. "When you look at the Fed today and the Fed in 2013, you wonder how you can have such wildly different policy views on what constitutes the right levels for employment, the right levels for inflation. It's almost like a split personality."
3. "We're going to be where we were pre-pandemic by October. And yet we are quantitative easing and juicing an economy that's already red-hot." – warning that the Fed is stimulating the economy even though the surplus of job offers to unemployment claims is on track to hit January 2020 levels in the next four months.
4. "You've got the craziest mix of fiscal and monetary policy. It goes against all traditional economic orthodoxy. Things are absolutely bats— crazy." – suggesting that the government throwing out the rulebook may have paved the way for the Capitol insurrection and the meme-stock and SPAC booms.
5. "If the Fed treats rising inflation with nonchalance, then it's a green light to go all-in on the inflation trades. I'd probably buy commodities, buy crypto, buy gold."
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6. "If the Reddit crowd ever gets into commodities, God forbid. Commodities are generally finite-supply, small markets. If we ever got retail investors actually nervous about inflation, those things can double or triple with no problem whatsoever."
7. "If I was Fed chair, I would have raised margin requirements two years ago. I would have said, 'Okay, we're gonna experiment with an unproven, untried, negative-real-rate economic program that is going to encourage a lot of leverage. We want asset prices to rise, we want you to take risks, we want to extend duration, but you need to be prudent in how you use your leverage and what you invest in."
8. "Bitcoin is math and math has been around for thousands of years. I like the idea of investing in something that's reliable, consistent, honest, and 100% certain."
9. "I like bitcoin as a portfolio diversifier and store of wealth. I want to have 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities. I don't know what I want to do with the other 80% at this point in time. I want to wait and see what the Fed's gonna do."
10. "It's really difficult. You cannot tax unrealized capital gains because of the volatility. But should the top 1% pay more? Absolutely." – commenting on the ProPublica report that found billionaires were paying little federal income tax relative to their net worth.