Macro investor Luke Gromen believes that gold and Bitcoin (BTC) are poised to thrive amid the deteriorating fiscal landscape of the U.S. government. In a recent discussion with David Lin, Gromen expressed his enthusiasm for both assets, stating they are “very well-positioned” to surge in an environment where the U.S. is likely to resort to inflationary measures to manage its debt.

As the founder and president of macro research firm Forest For The Trees (FFTT), Gromen highlighted the necessity for the U.S. to maintain negative real interest rates—where nominal inflation surpasses the interest rate—to sustain its budgetary requirements. Historically, this scenario has proven advantageous for gold and is expected to be similarly beneficial for Bitcoin.

He remarked, “Gold and Bitcoin thrive in a situation where the world’s most powerful and indebted nation, the issuer of the reserve currency, cannot manage its debt without negative real rates over an extended period. This creates an excellent environment for both gold and Bitcoin, which is why we see gold prices in dollars diverging from inverted U.S. real rates.”

Gromen pointed out that this trend is often observed in emerging markets, where rising rates lead to an increase in gold prices relative to the local currency. Although it has been a while since this occurred in dollar terms, it has been evident since 2022. The crux of the matter is that gold’s rise, despite increasing U.S. real rates, indicates that the government cannot sustain positive real rates, suggesting a turning point is near.

“I believe we are witnessing the early stages of an end to positive real rates in the U.S., which bodes well for both gold and Bitcoin,” he concluded.

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Disclaimer: The views expressed in The Daily Hodl do not constitute investment advice. Investors are encouraged to conduct thorough research before engaging in any high-risk investments, including Bitcoin, cryptocurrency, or digital assets. Please be aware that your trades and transfers are undertaken at your own risk, and you are responsible for any losses that may occur. The Daily Hodl does not endorse the buying or selling of any cryptocurrencies or digital assets, nor does it serve as an investment advisor. Additionally, The Daily Hodl participates in affiliate marketing.