John Malone, chairman of Liberty Media, told CNBC that hard assets look attractive as the unprecedented coronavirus stimulus could cause currencies to depreciate.
"We survived this [pandemic] because of huge fiscal and monetary stimulus," Malone said in an interview broadcast Thursday with David Faber, co-host of Squawk on the Street. "And I have to believe that this will cause currencies to depreciate, that hard assets … will increase in value in currency. I'm not sure if I will call this inflation, but it will look and feel like inflation . "
To help the economy through the pandemic, the Federal Reserve cut interest rates to near zero and promised to continue buying assets as part of its quantitative easing measures. Meanwhile, in March lawmakers signed a historic $ 2 trillion coronavirus relief deal that allowed Americans to do stimulus checks and other relief efforts.
"And I think we're seeing it in housing. This unrealistically low interest rate environment that was needed now to avoid worse problems," Malone said. "I find it hard to believe that this will not be followed by a period of currency devaluation."
Malone believes the massive boost will lower the value of the currency and make hard assets more attractive. Hard assets refer to property, plant and equipment including real estate and raw materials. The DXY US Dollar Currency Index is down more than 10% from its March high.
"I was trying to invest in hard assets or diversify," Malone said. "You know, I think things that I bought last year I bought … significant stakes in … apartment buildings, mostly in the US."
Record-low mortgage rates are driving demand for home purchases. Newly built home sales rose to their highest level in 14 years in August amid the culture of the coronavirus pandemic.
Malone said he is also getting into assets like farmland.
“I bought irrigated farms because the raw materials were cheap and the farms had a low value cycle. And I've always wanted an irrigated farm, so now I grow potatoes,” he said.
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