Tiger Management Chairman Julian Robertson says that if China and Japan stop buying our debt, inflation could hit 20 percent.
"It's almost Armageddon if the Japanese and Chinese don't buy,” Robertson told CNBC.
"I don't know where we could get the money. I think we've let ourselves get in a terrible situation."
Robertson’s 2008 picks, which included Visa, Baidu, Apple, and Google, handily beat the market. His worst performing choices went up 40 percent, the best more than doubled.
Robertson says his firm still owns many of last year’s picks, but says he’s “not as berserk over owning stocks as he is shorting bonds.”
“I think we’re going t have to pay the piper,” Robertson says, speaking of the current bull market.
“Interest rates are going to go up, and I would think … that would put the brakes on the economy (and) earnings would go down like crazy.”
“If we have 20 percent interest rates and 20 percent inflation and the market goes up five percent, that’s not a really good scenario.”
The Fed may keep its benchmark interest rate too low too long, causing the dollar to weaken, says Johns Hopkins professor Steve Hanke.
“They won’t do much as long as the headline inflation rate stays in that zone of zero to 2 percent,” Hanke told Bloomberg.
“It’s conceivable they’ll wait too long and they’ll probably keep as loose as they can before the elections.”
“2011 will be way too late.”
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