Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.
Mike Novogratz Warns of US and Global Credit Crunch – Expects Fed to Cut Rates ‘Sooner Than We Think’ – Economics Bitcoin News
Galaxy Digital CEO Mike Novogratz has warned of a credit crunch in the US and globally. He emphasizes that “we are heading into a recession”, and expects the Federal Reserve to cut interest rates “sooner than we think”.
Novogratz on global credit crisis and recession
Galaxy Digital CEO Mike Novogratz shared his outlook for the US economy in an interview with CNBC on Wednesday. Comparing the current state of the market to one in December 2018, he said: “This reminds me a lot of 2018, December, when the Fed had this idea of a final [interest rate] hike, and of course that sent the market spinning and they had to turn it around soon after.”
Noting that “information has changed dramatically” in a short period of time, he explained:
The commodity market is telling you, the oil market is telling you that we are heading into a recession. We are going to have a credit crunch in the US and globally.
Novogratz emphasized that Federal Reserve Chairman Jerome Powell “should take a break and will cut interest rates sooner than we think.” He added: “It’s a big shift in psychology. It has bitcoin (BTC) and ethereum (ETH) on the move.”
The executive continued: “If there was ever a time to be in bitcoin and crypto – this is why it was created, by governments printing too much money when the pain becomes too great, and we’re seeing it.”
In response to a question about whether he sees “the possibility of a contagion” in the US banking system and globally, Novogratz confirmed: “There is contagion.” He added that people are learning their lessons and eventually they will trust only four or five depository institutions.
“I think Congress and the Fed have to do something more dramatic … or we’re going to see constant pressure on these regional banks and the entire system,” Novogratz said, concluding:
Now we have a market that is going to enter a credit crunch, how do the banks rebuild capital? They lend less. You’re going to see a credit crunch in the US, and it’s going to be priced into the market in a dramatic way.
What do you think of Mike Novogratz’s statements? Let us know in the comments section below.
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