PANews reported on October 23 that according to The Block, analysts at trading and financial services company Presto said that the US election could trigger a collapse in the bond market, which would also have an impact on other assets such as Bitcoin. Presto analysts Peter Chung and Min Jung issued this warning after well-known investor Paul Tudor Jones was interviewed by CNBC on Tuesday. Jones said in the interview that in the current risk environment, he is optimistic about Bitcoin, gold, commodities and Nasdaq stocks.
"The U.S. debt-to-GDP ratio has risen from 40% to 100% over the past 25 years and could reach 124% to 200% in the next 10 to 30 years," the analysts wrote in a note. "The U.S. election could trigger a 'Minsky moment' when bond markets realize the problem and demand higher compensation for funding deficits." Chung and Jung argue that both Republican candidate Donald Trump and Democrat Harris have pledged "fiscal profligacy," leading to rising government debt levels, which heightens the risk of a bond market crash. They say inflating their way out of trouble is the only solution, echoing Jones' view that "all roads lead to inflation."
Presto analysts said Jones’s view is worth watching because it may be behind the recent rise in Treasury yields (and sovereign risk credit default swaps). Chung and Jung believe that the Bitcoin Act of 2024, which is currently awaiting approval from Congress, could help stabilize U.S. debt and potentially the global financial system. However, they added that neither presidential candidate has made the debt issue a priority, suggesting it is not a top concern for most voters.
