Ruminations Home

     Ray Dalio is the manager and co-chief investment officer of the world's biggest hedge fund, Bridgewater Associates. He has written extensively about economic cycles and has been outspoken in his warnings that the public always pays the price for their government's fiscal and monetary misadventures and are about to do so again. Here is a recent post.

                                         Source: CantonRep.com      They stand mute, shell-shocked and ashen-faced.  Finally, the central banker speaks up. I can't believe what's happened!! Who could have known that lowering real interest rates to below zero  for a decade following the sub-prime mortgage crisis - that we caused with low rates, excess liquidity and no regulatory oversight - could lead to high inflation? And who

"There is no art which a government learns sooner than that of draining money from the pockets of the people."  - Adam Smith 1723-1790     And there are those eager to facilitate that draining. Martin Wolf writes a column for the Financial Times newspaper. He is highly regarded - by those in government and academia. Larry Summers calls him "the world's preeminent financial journalist."  Mohamed A. El-Erian says he is "by far the most influential economist out there." Kenneth Rogoff calls him the "premier financial and economics writer in the world." Wolf recently penned an FT editorial, " The case for a land value tax is overwhelming ."  He wrote,

   So said Antonio in Shakespeare's  The Tempest,  to his co-conspirator Sebastian, to justify the murderous act they were about to commit. Today the phrase is used less ominously to mean that history sets the stage for what happens next. About that there can be little doubt. The present is necessarily built on the foundations of what has come before. This leads us to believe that our future will be an extension of the present. In the world of psychology, this is known as "recency bias." However, the future often plays out very differently than expected because we have misinterpreted what has actually happened and ignored obvious risks.