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Ray Dalio

@RayDalio

23 Dec

That is because printing a lot of currency and devaluing debt is the most expedient way of reducing or wiping out debt burdens. When debt burdens are sufficiently reduced or eliminated, the credit/ debt expansion cycles can begin again. (1/4)

As I explained comprehensively in my book Principles for Navigating Big Debt Crises, there are four levers that policy makers can pull to bring debt and debt-service levels down relative to the income and cash flow levels required to service debts: ... (2/4)

1. Austerity (spending less)
2. Debt defaults and restructurings
3. Transfers of money and credit from those who have more than they need to those who have less than they need (e.g., raising taxes)
4. Printing money and devaluing it (3/4)

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Ray Dalio

@RayDalio

21 Dec

Central banks want to stretch the money and credit cycle to make it last for as long as it can because that is so much better than the alternative. (1/4)

So when the system of hard money and claims on hard money becomes too painfully constrictive, governments typically abandon it in favor of what is called “fiat money.” (2/4)

No hard money is involved in fiat systems; there is just paper money that the central bank can print without restriction. As a result, there is no risk that the central bank will have its stash of hard money drawn down and have to default on its promises to deliver it. (3/4)

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Ray Dalio

@RayDalio

15 Dec

What I mean by that is that debts have to be paid above all else. For example, if you own a house (i.e., you have “equity” ownership) and you can’t make the mortgage payments, the house will be sold or taken away. (1/5)

In other words, the creditor will get paid ahead of the owner of the house. As a result, when your income is less than your expenses and your assets are less than your liabilities (i.e., debts), you are on the way to having to sell your assets. (2/5)

Unlike what most people intuitively think, there isn’t a fixed amount of money and credit in existence. Money and credit can easily be created by central banks. (3/5)

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Ray Dalio

@RayDalio

7 Dec

@TisBest

Last month, I offered you 20,000 @TisBest Charity Gift Cards to donate to the charities of your choice. There were no strings attached - my hope was simply that you would experience the joy of receiving a charitable gift rather than a traditional one. (1/4)

That offer was so popular that it was gone in less than a day. (2/4)

@AriannaHuff

I'm now happy to share that since then, a great group of people—@AriannaHuff, @aplusk, Mila Kunis, @Droz, @GayleKing, Jewel, @JayShettyIW, @Kevin, and Paul Tudor Jones —has stepped up to contribute so that we can together make a new offer. (3/4)

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Ray Dalio

@RayDalio

5 Dec

Now that things have calmed down I want to clarify what I meant when I sloppily answered a question about China from Andrew Ross Sorkin that created a misunderstanding of my views. (1/6)

I assure you that I didn’t mean to convey that human rights aren’t important because I certainly believe they are and I didn’t mean to convey that the US and China deal with these issues similarly because they certainly don’t. (2/6)

I am an American who has lived my whole life in the US, experiencing the American Dream, and I believe in our system. At the same time, I have spent more than half my life in contact with China which has helped me understand their system as well. (3/6)

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Ray Dalio

@RayDalio

4 Dec

Because knowledge is gained more than it is lost, it advances more in spurts and sputters than in cycles that have downs as well as ups. The spurts come when societies are in the upward swings of the Big Cycle and the sputters come when they are in the downward swings.

Renaissance periods of great creativity that produce advances in most areas (sciences, arts, philosophies about how people should govern, etc.) come more during the peaceful & prosperous parts of the Big Cycle, when the systems for creating innovations are good rather than bad.

While specific inventions and the ways they come about have evolved through time, they have unwaveringly evolved toward doing and making things better, replacing manual labor with machines and automation, and making people around the world more interconnected.

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