BTC and gold will rise “strongly” if Fed pivot triggers severe recession and stagflation: economist Peter St Onge

Peter St Onge, an economist at the Heritage Foundation think tank, says economic stagnation and high inflation could have a positive impact on Bitcoin (BTC) and gold.

In a new interview on Kitco News, the economist says periods of stagflation have traditionally been “very, very good for hard assets.”

A period of stagflation is characterized by high or rising inflation rates, slowing economic growth and high unemployment.

“I would be surprised if Bitcoin didn’t rise sharply if we fell into some kind of stagflationary trap where we followed the pattern of the 1970s, which was something like a camel’s hump (because it went up once, then fell again is). came back up).”

Peter St. Onge says how high Bitcoin’s appreciation could be:

“Gold rose six-fold in the 1970s – throughout the decade I think it rose even more, silver rose seven-fold.” And at this point it’s kind of an interesting parlor game to ask the question: Well yes, Bitcoin usually moves much more than gold. So if we get a second wind of stagflation and gold soars, what happens to Bitcoin?

I’m very excited to see what exactly happens there, but I would be surprised if Bitcoin didn’t rise sharply as well.”

According to the Heritage Foundation economist, the Federal Reserve’s actions will be the telltale signs of the economic outlook.

“If we reach a point where inflation is still rising but the Fed starts cutting rates, then the death cross comes into play. That’s where you’d really worry because you’d say, ‘Wait a minute, so the inflation work isn’t done yet.’ Have you simply given up on the tools you use to fight inflation?’. That’s basically telling you, “Okay, so you’re afraid of something bigger?”

And above all, they would be afraid of a massive crisis, perhaps not a depression, but a severe recession. Something like the 2008 crisis.”

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