• Billionaire investor Ron Baron said he’s never owned a government bond before.
• That’s due to rising inflation and the growing mountain of US debt, he suggested.
• Inflation could slash the value of money in half every 15 years, Baron estimated.

Billionaire investor Ron Baron said he has never owned a bond before and invests his cash amid inflation and the expanding US debt pile.

In an interview with CNBC on Friday, the chairman of Baron Capital said he was “amazingly bullish” on the market and was buying assets “every day.”

But he then pointed to the effect that government spending and borrowing has on inflation and the ability to repay debts.

“The way they pay it back is not the government paying down any debt,” he said. “They pay it back by making your money worth less.” 

He estimated that inflation was bound to reduce the value of cash in half by around every 14-15 years, as inflation accelerates around 4%-5% annually over the long term.

When asked about buying bonds, Baron replied, “I’ve never owned a bond. … I don’t have a lot in cash either. I’m always invested. And whenever I have a chance to buy more, I buy more.”

His avoidance of bonds comes as financial markets have demonstrated less demand for fresh US debt amid ballooning federal deficits. 

On Thursday, a Treasury auction of $24 billion of 30-year bonds was met with a lackluster response from investors, forcing primary dealers to pick up the slack and sending yields higher. That followed a string of weak government bond issuance last month. 

With deficits expected to remain massive, Bank of America forecasted the total public debt balance could hit $50 trillion in the next 10 years, up from $33 trillion now.