- Hedge fund legend Ray Dalio says the economy looks like it did in the late 1930s in many ways: interest rates hit zero in the early stage of each crisis, asset prices are near full capacity, interest rates are still low, the wealth gap has widened, populism is on the rise, and global tensions are rising.
- Dalio says: "We're in the later part of the cycle, the part of cycle in which monetary policy is tightening and there's not much capacity to squeeze out of the economy." He expects a downturn in roughly two years.
- Dalio says the way to handle the situation so we don't repeat the late '30s and '40s is to make sure that capitalism works for a majority of the people.
- Dalio goes on to say it's not just about a wealth gap but also an opportunity gap. He calls the issue a national emergency.
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Ray Dalio says the economy looks like 1937 and a downturn is coming in about two years
Ray Dalio is the founder and co-chief investment officer of Bridgewater Associates, the largest hedge fund in the world. Dalio is sharing his template for understanding debt crises which he says helped him and his fund forsee and navigate the financial crisis.
The phases of the classic deflationary debt cycle.
Ray Dalio is the founder and co-chief investment officer of Bridgewater Associates, the largest hedge fund in the world. Dalio is sharing his template for understanding debt crises which he says helped him and his fund foresee and navigate the financial crisis. He sat down with Business Insider CEO Henry Blodget to discuss this new book and his outlook for the economy. Follwoing is a transcript of the video.
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Interest rates hit zero in the early stage of both the 1930–1932 depression and the 2008–2009 depression.
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