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Raoul Pal, a former Europe hedge fund sales lead at Goldman Sachs, is preparing for a generational economic crisis by shifting more of his portfolio into bitcoin and gold.
Pal said in a recent interview with Real Vision Group’s Howard Lindzon the global financial system is heading towards an economic catastrophe as a result of the coronavirus. Pal predicted a 20% plunge in equities in the short-term and expects many businesses to fail in multiple sectors of the economy.
He said, “I think the balance of probabilities are that this is a much longer event in terms of the economic impacts… And I think it’s going to be the largest insolvency event in all history.”
Pal called the coming recession a “generational change” and said it would have a lasting impact upon the psyche of younger generations, saying, “They will look upon, with some suspicion, the pension system which is going to fail in this. They’re going to look across securities markets in ways that they will think ‘this is just not for me.’ They will have different opinions on risk and savings than previous generations.”
Pal argued millennials were scarred by the global recession in 2008, leading them to mistrust the financial system and seek novel alternatives. He also revealed his portfolio allocation in light of the looming economic collapse, commenting, “My allocation that I want to be in for the next 12 months probably, maybe longer, is 25% Bitcoin, 25% gold, 25% cash, and 25% trading opportunity.”
Pal’s remarks preceded JPMorgan CEO Jamie Dimon’s address to shareholders on April 6, warning that “at a minimum” the market is heading towards a recession similar to 2008.
