Apple co-founder Steve Wozniak also commented on Bitcoin, calling it a “mathematical purity” unlike USD, in which “the government can just create new and borrow; it is like you never have it fixed.”
The billionaire investor Peter Thiel says the high price of Bitcoin indicates that inflation is real and not transitory.
Speaking at a conservative conference over the weekend, Thiel said that at its current prices, above $62,000, Bitcoin is not a good buy.
“You know, $60,000 Bitcoin, I’m not sure that one should aggressively buy.”
“But surely what it is telling us is that we are having a crisis moment.”
Just a few days back, Thiel had described the high crypto prices as “the canary in the coal mine,” saying it is a sign that the “decrepit … regime is just about to blow up.” At the time, he also expressed his feeling of being “underinvested in it.”
This time as well, Thiel said he regrets not buying more Bitcoin earlier at cheaper prices.
Thiel, who co-founded PayPal and Palantir Technologies, criticized the Federal Reserve for not addressing inflation and failing to recognize its seriousness.
Fed Chairman Jerome Powell has confirmed that it will take time for inflation to come down but that there are tools that the central bank can use to bring it back down to their targeted 2% level, explained Thiel.
“No one should doubt that we will use our tools to guide inflation back down to 2%.”
Before the weekend, Apple co-founder Steve Wozniak also commented on Bitcoin, calling it a “mathematical purity” and compared it to the greenback, which “the government can just create new dollars and borrow; it is like you never have it fixed.”
Wozniak also believes that crypto can be used “effectively” for payments.
“Crypto just has a little bit of anonymity. I don’t know if that’s right that I can do things without people knowing. It is hard to trace back crypto, though it is possible,” Wozniak told Yahoo Finance in an interview.
Supply Problem Not A Demand Problem
The spending of US consumers also increased solidly in September, in part due to higher prices. Inflation pressures are broadening out, as can be seen in employers boosting wages by the most on record in the third quarter. The economy meanwhile grew at its slowest pace last quarter in over a year.
“The economy has a supply problem, not a demand problem,” said Christopher Rupkey, chief economist at FWDBONDS in New York.
“The economy has money to burn and that is why inflation will be hard to extinguish.”
According to the Commerce Department, accounting for more than two-thirds of US economic activity, consumer spending rose 0.6% in Sept. after rebounding 1% in August.
With price pressures remaining strong in September, it reduced consumers’ buying power. As such, the personal consumption expenditures (PCE) price index, excluding food and energy components, climbed 0.2%, the smallest gain since February, and followed a 0.3% rise in August.
The core PCE price index, which is Fed’s preferred inflation measure for its 2% target, meanwhile jumped 3.6% for the 4th straight month.
The Employment Cost Index also surged 1.3% in q3, the largest gain since q1 of 2001 when the government first started tracking it.
While the wages increased by 0.8% last month, the saving rate fell to 7.5% from 9.2% in August, but still high. Household wealth is also at a record high and consumers accumulated at least $2.5 trillion of excess savings during the pandemic.
The Fed is now expected to announce tapering at this week’s policy meeting.