Money and Finance
- Hussman Weekly Market Comment: Out On A Limb - An Investor's Guide To X-treme Monetary And Fiscal Conditions
Government intervention in the U.S. economy is approaching the point where probable long-term costs exceed short-term benefits – straining to maintain the pace of extraordinary fiscal and monetary measures that have repeatedly nudged the U.S. economy...
- Ray Dalio: Southern Europe Is About To Enter A ‘lost Decade’
Found via The Big Picture. The euro zone crisis will likely create a “lost decade” in southern Europe, hedge-fund honcho Ray Dalio said Wednesday. The founder of the hedge-fund giant Bridgewater Associates was speaking Wednesday morning at the Council...
- Ray Dalio On Monetary Policy During Deleveragings
As quoted by Jack Schwager in his book Hedge Fund Market Wizards: “Unlike in recessions, when cutting interest rates and creating more money can rectify this imbalance, in deleveragings monetary policy is ineffective in creating credit. In other words,...
- More Ray Dalio Quotes
More Ray Dalio quotes from Jack Schwager’s book Hedge Fund Market Wizards. I think the last couple of long paragraph quotes below are especially important in regards to the current situation in the U.S. “We don’t use stops. We trade approximately...
- Bridgewater Q2 Letter: Outlook And Markets Discussion
Via Zero Hedge. The developed world remains mired in the deleveraging phase of the long-term debt cycle. The European deleveraging has been badly managed and is escalating, bringing Europe closer to either a debt implosion or a monetization and currency...
Money and Finance
The Secret Of Bridgewater's Success Is In Its Understanding Of The Recession
Found via Canadian Value Investor.
The Bridgewater view may be summarized like this:
- Business and market cycles occur every 5 to 8 years, and may be addressed by policy makers with a typical mix of fiscal and monetary policy.
- What Bridgewater calls Long Wave Debt or Deleveraging Cycles occur once in a lifetime, every 50 to 70 years, and do not typically respond to existing fiscal and monetary policies.
- On the contrary, Deleveraging Cycles are characterized by massive wealth destruction and shifts, dramatic changes in monetary regimes, and unsettled political environments, including wars. They tend to have very slow recoveries (about 10 years) and end with debt restructuring and repudiation, inflationary policies, and substantial increases in risk premiums.
- The Great Recession that began in 2008 is the first US Deleveraging Cycle since the Great Depression. As such, it is immune to the usual policy responses, and can be expected to continue its path of wealth destruction through debt restructuring and inflationary redistribution of wealth up to 2018!
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Related links:
An In-Depth Look at Deleveragings
How the Economic Machine Works
- Hussman Weekly Market Comment: Out On A Limb - An Investor's Guide To X-treme Monetary And Fiscal Conditions
Government intervention in the U.S. economy is approaching the point where probable long-term costs exceed short-term benefits – straining to maintain the pace of extraordinary fiscal and monetary measures that have repeatedly nudged the U.S. economy...
- Ray Dalio: Southern Europe Is About To Enter A ‘lost Decade’
Found via The Big Picture. The euro zone crisis will likely create a “lost decade” in southern Europe, hedge-fund honcho Ray Dalio said Wednesday. The founder of the hedge-fund giant Bridgewater Associates was speaking Wednesday morning at the Council...
- Ray Dalio On Monetary Policy During Deleveragings
As quoted by Jack Schwager in his book Hedge Fund Market Wizards: “Unlike in recessions, when cutting interest rates and creating more money can rectify this imbalance, in deleveragings monetary policy is ineffective in creating credit. In other words,...
- More Ray Dalio Quotes
More Ray Dalio quotes from Jack Schwager’s book Hedge Fund Market Wizards. I think the last couple of long paragraph quotes below are especially important in regards to the current situation in the U.S. “We don’t use stops. We trade approximately...
- Bridgewater Q2 Letter: Outlook And Markets Discussion
Via Zero Hedge. The developed world remains mired in the deleveraging phase of the long-term debt cycle. The European deleveraging has been badly managed and is escalating, bringing Europe closer to either a debt implosion or a monetization and currency...