Central banks have created an environment where both major downturns as well as expansions are almost impossible, venture capitalist Chamath Palihapitiya said Tuesday.
A well known investor across a multitude of areas, including as a very early Facebook executive and a big proponent of cryptocurrencies, Palihapitiya told CNBC that entities like the U.S. Federal Reserve have used quantitative easing to stage manage an essentially stagnant economy.
“I don’t see a world in which we have any form of meaningful contraction nor any form of meaningful expansion,” he told CNBC’s Scott Wapner during a “Fast Money Halftime Report” segment. “We have completely taken away the toolkit of how normal economies should work when we started with QE. I mean, the odds that there’s a recession anymore in any western country of the world is almost next to impossible now, save a complete financial externality that we can’t forecast.”
For investors, that means a limited menu of choices.
“So the reality is we’re going to grow low single-digits every year, which means there’s no growth anywhere else, which means you’re better off buying equities and you’re better off buying equities that are substantively ones that are sort of the deflationary stocks, the cheaper, faster better stocks, the tech stocks,” he said.