The most important principle to keep in mind when thinking about large government debts and deficits such as those that we have and that are coming is when countries have too much debt, lowering interest rates and devaluing the currency that the debt is denominated in is the preferred path government policy makers are likely to take. So it pays to bet on that happening. That means betting on a weaker currency and uh lower real interest rates are the best path.And the reason governments uh prefer to take tha ...

I was recently down in Washington DC meeting with uh senior people on both sides uh the Republican side and the Democratic side about the budget deficit and virtually everybody agrees that you have to get the budget deficit down to 3% of GDP and then I say why can't we make or you make a pledge that you will get it down to 3%. and they explain the absolutist policies that uh must exist and those are that you must make statements like I will absolutely pledge not to raise your taxes or I will absolutely pled ...

Everybody I speak with on both sides of the aisle agree that it's got to be a 3% of GDP. It's like but politics, we're having politics. The country um is at war.Two sides, the left, the right. The issue of how do you run the country. Very, very big differences.And that is um a difficult thing in our democracy because everybody's arguing and politics is standing in the way and making good decisions. and the idea of compromise, you know, that's out. I don't think anybody doubts uh that we need a renovation in ...

In 2008, he sounded the alarm about the impending financial crisis. And now he's warning about something even more important. He's the author of the brand new book, How Countries Go Broke: The Big Cycle.And Bridgewater Associates founder Ray Dio joins us now. Great. Uh, Ray, great to see you.Congratulations on the book. Thank you. Uh, it really relates now how countries go broke because everyone's should be concerned about the deficit that alarms you.Why. Well, there's a supply demand. you know, when they t ...

So what we see is an argument between the president of the United States and the head of the Federal Reserve and others about the independence of the Federal Reserve and the monetary policies that are being pursued. And so that argument is um um a general belief, a historic belief that um by having a central bank that is independent of the government, there is um a greater willingness to not do the politically expedient things of making credit to available. and they will defend the value of money and they'l ...

a lot of investors very uncertain about the direction of rate cuts into the end of the year. Currently, the market is pricing in around two, but you had Atlanta Fed President Raphael Bostic saying maybe one this year. Do you think given where we stand in the economy today that the Fed has room to cut.I think um I think the Fed right now uh should not cut monetary should not cut interest rates and it's in a very difficult position to try to balance these things. There's a great deal of uncertainty and there' ...

Do you see merit in the president trying to restructure trade relationships with the major powers from the EU to China to the smaller ones like Vietnam. Do you see merit. It it's got to happen. It's got to happen for a couple of reasons.First of all, it's one of the reasons we're also getting into a lot of debt, but partially it could also contribute to uh tax revenues, but also these imbalances are not uh sustainable. Not they're not sustainable not only because of the debt issue and the trade issue to mak ...

One way or another, you have to bring debt the deficit not only in the United States but other places but I'm focusing on the United States down to from a supply demand point of view down to about 3%. So that's the 3% of GDP that that's an amount that the market I think can digest. Um it will um affect also the supply demand.There are when I say three parts I think when we think of budgets we think of taxes and spending um but also interest has a huge effect. um a 1% change in the interest rate, 100 basis p ...

Welcome to very special conversation with uh Ray Dalio who has agreed to share with this audience thoughts that led him to publish his most recent book. Today we face a future in which growth is slow and that is very high. To me reading this book uh was a great um professional enjoyment because it is about a complicated topic.What a gift you are giving us uh with your time and your wisdom. I learned through my experience that many important things that uh came at me never happened in my life before but happ ...

There are orders, you know, there's a monetary order, there's a domestic, political, social order. Um there's a global world and they go through tend to go through a cycle um in which they break down and you have new orders. So a good example would be let's say 1945, we have a new monetary order, we have a new uh all those orders.Um, and then when they break down, um, you wipe out a lot and you have a new beginning and everybody remembers the trauma of the past and then there's the building up of credit, th ...