Nasim Taleb, risk management guru and author of “The Black Swan,” has slammed Bitcoin, calling it a tumor caused by easy money.
In an interview with CNBC, the New York Times best-selling author described Bitcoin, as well as the real estate market, as a “tumor” caused by inept monetary policy. He believes that years of zero percent interest rates maintained by the Federal Reserve Bank of the United States have harmed the economy and created bubbles such as Bitcoin.
“At zero interest rates… for long periods of time, you are hurting the economy. You’re creating bubbles, creating tumors like bitcoin, creating hedge funds that should not exist but have existed for 15 years,” Taleb said.
His statement refers to the Fed’s decision to keep the funds target rate at a range of 0% to 0.25% between 2008 and 2015 in order to combat the 2008 global financial crisis. In response to the COVID-19 pandemic, the Fed also reduced interest rates to near zero in 2020.
Taleb contended that easy-money monetary policy has blinded an entire generation of investors to the effects of a recession, which last occurred in the 1980s. They are in for a rude awakening, however, because the Fed is now determined to slow inflation by raising interest rates in order to return markets to “normal economic life.”
When asked what he considers normal, he predicts that interest rates will rise to around three to four percent.
This isn’t the first time the ex-options trader has slammed Bitcoin. In an interview with CNBC last year, he called the first digital currency a “contagious disease” and an “obsolete product of low interest rates” with “zero value.”