Billionaire investor icon, Ray Dalio, Bridgewater Associates founder, co-chair, and co-chief investment officer, discusses his new book, “A Template for Understanding Big Debt Crises” in a recent interview with CNBC.
Ten years later, Dalio looks back on the lessons learned from the financial crisis.
Biggest Lesson to Learn from Debt Crises?
When asked what the biggest single lesson on debt crises, Dalio states:
“Of all of them. There is the debt growth that finances the bubbles that happens before it that creates the bust.”
Ray Dalio Predicts We Are in the 7th Inning
“We’re in, I would say the 7th inning of the cycle. I think that were at the stage in the cycle where interest rates are being raised. Were in the later stage probably, maybe we have 2 more years I would say into the cycle. The issues of this debt crisis are very different than the last debt crisis.”
Dalio looks at the similarities between past debt crises and the one approaching. He touches on a new shadow banking system and monetary policy surrounding quantitative easing. Dalio gets political towards the middle of the interview, arguing the wealth gap has led to “populism” politics. Finally, on debt crises,
“The reason I wrote the book… They all happen in the same way. There is all the mechanics in the same way.”
Ray writes about these mechanics in his latest book.