Who is Ray Dalio in Real Life

US star investor Ray Dalio "Cash is rubbish, bonds have become nonsensical"

The effects can be seen in the financial markets. “There is just so much money being injected into the markets and the economy that the markets are like a casino with people playing around with“ funny money ”. They buy all kinds of things and drive down the returns on everything. That's why stocks have risen so sharply and classic bubble dynamics have formed in so many assets. "

"Traumatic," Dalio said, a big sell-off in the bond market would be for those who hold the debt fortune, basically traumatic for most people, although it ultimately lowers the ratio of debt, and especially debt servicing, to income. It would also be traumatic for the capital markets, capitalism and the national economies. During this credit or debt collapse, "people find that they don't have as much purchasing power as they thought and that financial and economic conditions are deteriorating."

Dalio recommends a well-diversified portfolio of non-debt, non-dollar-linked assets and the smallest possible cash position. This strategy is preferable to a traditional mix of stocks and bonds. He also repeats his thesis that the Asian markets will outperform the western industrialized countries in the future.

He also believes that the scenario that the problems will lead to massive tax increases and, in addition, possible bans on relocating capital to other locations or into alternative assets such as gold or Bitcoin, is possible. However, Dalio warns that a US wealth tax such as that proposed by Senator Elizabeth Warren would only result in capital outflows and efforts to evade the tax. "The United States could be perceived as a place that is inhospitable to capitalism and capitalists," he wrote.

Dalio also finds an investment in non-debt-based and non-dollar-linked assets, such as gold and Bitcoin, sensible, but at the same time warns that an investment in such values ​​could be prevented or at least restricted by the state in the future.