Morgan Creek’s Anthony “Pomp” Pompliano says the Federal Reserve’s attempts to control inflation are likely to end in disaster — which will benefit Bitcoin.

The Fed is currently completing an annual policy review and reportedly considering a plan to not raise interest rates until inflation hits 2%. In a Aug. 5 letter to subscribers titled The Wizards of The Federal Reserve Pomp said the Fed’s efforts to ramp up inflation has put it “on a path that could end disastrously.”

He stated the nature of the U.S. economy means it is “nearly impossible to manipulate with nuanced control” and the central bank has a poor record with inflation targets over the years, having only “come within +/- 10% of that target 3 of the last 10 years.”

He described a “worst case scenario” where the Federal Reserve overshoots their inflation target amid worsening economic problems and need to print more stimulus but can’t raise interest rates quickly enough:

“If that were to happen, the Federal Reserve would be accelerating inflation at the exact moment that they should be reigning it in. I wish that I could argue that this scenario would be hard to see coming, but rather I think it is actually likely.”

Anything but the dollar

Pomp encouraged investors to avoid hoarding cash as the Fed’s efforts contribute to devaluing the dollar. The ICE U.S. Dollar Index, which measures the currency against six major rivals, fell 3.9% in July, from 97.2 to 93.3.

“My anticipation is that real estate, gold, Bitcoin and stocks are all going to run much, much higher than they already have,” said Pomp. “Bitcoin is going to be the largest winner out of all assets since it is the most volatile.”

Prices rising during pandemic

Despite the official inflation rate of roughly 1%, consumer prices across the United States are reportedly surging. The Bureau of Economic Analysis reported that from February to June, meat and poultry prices rose nearly 11% with the biggest price impact on beef and veal which have increased 20%.

The grocery store inflation comes at a bad time for millions of Americans, with the $600 boost to weekly unemployment payments expiring on July 31. Roughly 30 million Americans now collect an average of $1,284 every month instead of $3,684.

Democrats and Republicans are pushing their respective plans for stimulus packages, worth between $1 trillion to $3.4 trillion, with a resolution expected by Aug. 7.