Citadel CEO Ken Griffin has said that more investors now see gold as a safer option than the US dollar, a shift he finds “really concerning”. He said people are moving their money away from dollar-based assets as they try to reduce the risks tied to the US government and its debt.
Griffin in an interview with Bloomberg said that investors are trying to “de-dollarize” their portfolios by buying assets like gold, silver, and even Bitcoin. This move has pushed gold prices to record highs this week, helped by concerns about the ongoing federal government shutdown and the expectation that interest rates might soon be cut.
Many investors believe the US economy is showing signs of stress, and that’s pushing them toward assets that hold value better during uncertain times. The trend has been nicknamed the “debasement trade,” as people try to protect their money from the dollar’s weakening value, Bloomberg reported.
‘US economy on a sugar high’
Griffin said the current situation in the US looks more like a recession recovery period than a normal growth phase. He pointed out that the government’s large spending and the central bank’s loose monetary policies are fueling this unusual strength in the markets.
“We’re definitely on a bit of a sugar high in the US economy right now,” Griffin said, adding that a short-term boost could fade quickly once the stimulus slows down.
Griffin made these remarks during a Citadel Securities conference in Manhattan. The company, which he founded in 2002, connects buyers and sellers in stock and bond markets. It works with a wide range of clients, including asset managers, banks, hedge funds, and public pension funds.
‘I worry far more about the brilliant student in India who doesn’t come to America’
In the same interview, Griffin also commented on the US government’s plan to increase costs for companies sponsoring employees on H-1B visas. “Fortunately, we’re in a sector of the economy where a $100,000 one-time cost to hire a person is not going to be make it or break it,” he said.
However, he added that he is more worried about the broader impact like the talented students from countries like India and China might decide not to come to the US at all. Griffin said America risks losing some of the brightest minds in science, mathematics, and technology if opportunities become too costly or restrictive.
“I worry far more about the brilliant student in India who doesn’t come to America, or the gifted student in mathematics and physics that chooses to stay in China,” he said.