Mark Yusko, CEO of Morgan Creek Capital Management, says the global bond market is a big bubble, and thinks that bitcoin offers the ultimate insurance.
Morgan Creek Capital Management manages investments for institutions and wealthy families. Yusko made his statements during an episode of Fast Money on CNBC.
The bond bubble is about to burst, warns @MarkYusko. Here’s why. pic.twitter.com/aHpUjMgUEE
– CNBC’s Fast Money (@CNBCFastMoney) August 14, 2019
Biggest bubble ever
“I think we have the largest bond bubble we’ve ever seen in history. I think the signs of decline are starting to show. “
The Dow lost 800 points on Wednesday, which is currently the worst day of 2019.
“We have been talking about this since last fall, because the current market is very similar to that of 2000, 2001, 2002. In 2001 we had a mild recession and it was 2002 when the bond bubble exploded by Enron and WorldCom. And I think the same thing is starting to happen here. You have so many companies that really have too much influence. They have made debts to buy back shares. “
Bonds and debts
Yusko lists governments where bonds are falling, Germany, Switzerland and Japan, and companies he believes are embroiled in an unhealthy debt dynamic, including Pepsi, Coke and McDonalds.
“There are companies like Tesla where the assets could disappear in an instant, there are many companies that have a lot of debts to buy back shares. I think that is a bad idea if we enter a weaker economy. “
Bitcoin as insurance
Yusko says he is nervous about how bad the world economy is. Despite the recent fall in the price of bitcoin, he maintains that bitcoin is a safe haven.
“I’ve been saying for a long time that people who look at Bitcoin’s daily price really miss the point. The whole idea of Bitcoin is that it is a value store. It is a chaos hedge or “schmuck insurance” as I like to call it and what we have to think about is the long-term trend. “
“The lowest point is higher every year. The value of the network is increasing. And so, if you worry about daily valuations and prices, you miss the most important point: you can own part of the network. “
“Assure yourself by investing one, two, three, five percent of your assets in bitcoin. This is an insurance policy against all problems on the currency and stock market. Shares are overvalued. Bonds are overvalued. It is hard to find something that is undervalued. “