Billionaire venture capitalist Chamath Palihapitiyastated that he expects inflation to continue on a global scale in 2023. The billionaire also announced his cryptocurrency strategy for 2023.
Speaking on the new episode of All-In Podcast, Palihapitiya thinks that inflation will not go away as quickly as people think.
“I’ll explain inflation in three different parts, and we’ve seen the first two parts play out. So 2021, part one, was all about energy inflation… It caused the first spike in inflation and then we went down…
We have indeed experienced commodity inflation in 2022. All these prices and all these things went up as input costs went up and we all had to suffer the consequences. But then it started to decline.
Now, looking at the end of 2022, what I found interesting was the number of articles I saw about wage inflation, whether it was Biden’s use of a law from the 1800s to prevent a railroad strike, the number of states raising the minimum wage, or the trend towards unionisation. My general opinion is that the pendulum swings very significantly away from capital and towards labor.
As the labor force participation rate remains low and continues to fall, plus the unemployment rate, it will be harder and harder to get the job you need at your company unless you pay more.
If this situation is exaggerated, inflation will stay where it is.”
The famous billionaire announced that his strategy will be more conservative and likely focus on investing in government bonds as he expects inflation to remain high.
“I would have a combination of cash and the front end of the yield curve, that is, from Treasury bills to two-year bonds. By having these while you wait for things to become more certain, you can probably get a pretty confident 4.5% return of 5% by the end of this year. My opinion on this is that I’d rather miss the first 10% or 15% of a rally when we’re really done with this, than try to overcorrect and pick a bottom.”