Scary stumbling response here.
The hero’s of this generation are the villains of the next.
Ignoring genocide for $ …smh…#principles https://t.co/CExuYgJMhf
— Tyler Neville (@Tyler_Neville_) December 1, 2021
The whole “strict parent” metaphor is wrong. Regardless of whether they were strict or not, a good parent would protect their children from abuse, not “disappear” them and suppress legitimate cases of abuse.
Ray Dalio: Radical Transparency
Ray Dalio: Debt Monetization
Transcript00:00another one of your publications is00:02carry with me is principles for00:04navigating the big debt crisis we follow00:06debt levels here we do debt reports debt00:08accumulation port set aside some00:10statistics this morning are you worried00:11about where we are in debt accumulation00:13at the household sovereign or global00:16level or are we near tipping points as00:20you look in debt accumulation around the00:22world are you concerned I’m I look at00:26things in a very mechanic mechanical way00:29and so what concerns me about debt we’re00:33in a new world now and what concerns me00:36about debt is the nature of the dynamic00:42in which you don’t have to service debt00:45and what I mean by that is to a larger00:48extent than ever before this debt growth00:51the maturity of the debt has been00:53extended a lot the interest rate becomes00:57negative or or near negative so the debt01:00service payments for the interest rate01:02go down a lot and it’s almost the01:06situation where there’s guaranteed debt01:09rollovers so principle does not have to01:12be rolled over in a number of cases and01:14there’s low covenants and so when you01:18start to look at this the thing you say01:20what is going to cause a debt service01:24problem in 2007 we calculated that we01:27would have the 2008 financial crisis by01:29doing those pro-forma numbers and then01:32when we’re dealing now in this seemingly01:34crazy or odd other reality in which the01:39you don’t have to pay interest and you01:42don’t have to rollover your debt and and01:45that and then you play with negative01:47interest rates you say how do how will01:50that work okay and so if we look at01:53periods of time in history and we’re01:55somewhat those types of things happen01:58maybe for example of war years one if we02:00look at the war years and we look at ya02:03let’s call year-old yield curve02:06targeting with the low interest rates02:09and the mechanics of that that produces02:11a different02:12mechanics now so when I look at what’s02:15ahead and I think about that and my02:18stretches my imagination because I I02:21know even beyond that we will have much02:24larger deficits so if we not only do we02:27have the debts that you’re referring to02:28right and their maturities but we have02:31will have larger deficits which will02:34grow and in addition we have pension02:37liabilities and healthcare liabilities02:39and other forms of liabilities that will02:42come at us02:42they’re very cashflow driven because02:45you’ll have to make those types of02:47payments and so they’re coming at us at02:49the same time and then you deal with02:51okay how will that be dealt with and02:54funded so you have to go through the02:56imagination of the fact that they will03:00probably be monetized and in other words03:03they’ll have debt03:04central banks will be in a position that03:06they’ll have to buy the debt and so as03:08we go from other countries let’s say if03:10we go from Japan which 46% of it’s very03:13large debt is owned by the Bank of Japan03:16and we keep moving that up that’s the03:19mechanics that we have in place and so03:21when I extend that and I look at that I03:23think we are in the last stages or the03:27less end of last stages of what is03:30currency what is a reserve currency how03:32does that monitor that our Fiat monetary03:34system work because let’s say currency a03:39bond is an asset that is a promise to03:43receive a lot of currency okay now how03:48do much do I want that and and because03:51I’m going to have let’s say a negative03:53interest rates are close to a negative03:55interest rate so you know then you start03:58to think of the arbitrage as do I want04:00the paper currency in the thing do I04:02want gold do I want some other04:04alternative type of currency and then04:07increasingly there will de facto be04:09taxes on owning that asset because tax a04:13negative interest rate is a form of04:14taxes and as we go more and more to04:16digital currencies the arbitrage between04:19putting cat paper in a vault will be04:23increasingly eliminated04:25so we’re at the when I talk about the04:27long-term debt cycle04:29I mean that there’s in in the history04:32you know you wipe out the debts and then04:34you don’t have debts but and then you04:37can create the stimulation and that04:40happens and you always hit it with a04:41jolt of stimulation until then you get04:45to interest rates hitting zero or close04:47to zero and then they don’t work so04:50that’s monetary policy one is interest04:53rates monetary policy two is then when04:56that doesn’t work you print money and04:57you buy it when that doesn’t work you05:00have this phenomenon that we’re in we’re05:03at the end of the long term debt cycle05:04and you have the dynamic so the classic05:08debt crisis that we’re looking at is05:12doesn’t look like the ones that I’ve05:15seen in the past it looks more like the05:18ones in the like and at one late-30s05:21what we’re at the end of that cycle05:23because in the past the way they would05:26happen would be you know do you have a05:28certain amount of debt central and the05:30economy’s overheating central bank05:32tightens monetary policy or even that05:35you run through and you say what’s the05:37debt rollover problem right so we’re not05:39going to have the classic debt rollover05:41problem we’re not going to have the05:43classic tightening of monetary policy so05:46when we think about those things and say05:48oh we’re going to have a debt problem we05:50have things to be concerned about in the05:52way I’m describing but they’re not going05:54to be the classic ways that this has05:57come to an end if we can’t afford the06:00liabilities and I agree that if you look06:01at the net present value of the US06:02government’s entitlement programs that06:04the gap the net present value is about06:0635 trillion and add to that 20 trillion06:09and federal debt and we’re adding a06:11trillion a year so huge sums of money if06:14to your point that we end up cancelling06:16or reducing those liabilities for every06:18liability that’s an asset so someone06:20who’s holding that asset is going to be06:21poor and there could be a distributional06:23piece of that so making to your point if06:26we simply write off the debt we’re06:28destroying a tremendous amount of growth06:29so the way that it’ll be done is by06:32printing it and evaluating the currency06:35because that’s the very subtle way and06:37it’s also06:38looks it looks good because when you06:41have a currency depreciation first of06:44all it’s very hidden tax right let’s put06:46a negative interest rate it’s not like a06:47tax rate change that’s a that’s06:49controversial you just have a negative06:51interest rate and okay that’s one that06:53form of tax and when you have a currency06:55depreciation it causes one’s assets to06:58go up06:59it’ll be inclined to make the stock07:01market go up depreciate the currency Iclerking on the floor of the New YorkStock Exchange in 1971 when the August15 1971 Sunday nightNixon floated the dollar right and Iwent on the floor of the New York StockExchange that clerking and I thought wowwe have a real crisis here and the stockmarket rose the most in my lifetimebecause a currency depreciation alsotends to raise asset prices in variousways so the the if you’re in thatposition the hidden way the effectiveway to do that is to monetize the debtand have the depreciation as distinctfrom like you write it down and like yousay somebody’s assets that doesn’t workwe cover these things in that book bythe way that book if you’re interestedprinciples for navigating big debtcrisis is available free online at08:03economic principles calm but it’s so08:07these things have happened over and over08:08again08:09I think mechanistically it means that we08:12will print the money that doesn’t mean08:15necessarily inflationary okay like in08:18the 1930s we had a series of currency08:21depreciations a lot of printing of money08:23but you also had the other forces that08:26meant that and so the Dinah I think08:28it’ll be kind of seemingly hidden but08:30it’ll but we’re still right close to the08:33point where nobody that you may not want08:37to own those bonds okay and you’ll look08:40for what else and the question is what08:44else what is that else okay that’s the08:47environment I think that will be it and08:49you know there’s a08:50that gold is the only asset you can have08:52that’s not somebody else’s liability so08:55anyway I don’t know what those08:58alternatives are but I would say if more09:01gold is more likely than the
Ray Dalio: History Teaches us that Inequality is Dangerous
<iframe width=”560″ height=”315″ src=”https://www.youtube.com/embed/Ca9uu36w_Vo” frameborder=”0″ allow=”accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture” allowfullscreen></iframe>45:36the references you make here goes to 30sand referencing cow you know the top 1%in the 30s versus today you know youshowed this that the top 1% in the 30sversus today you know top 1% incomeshare has the same amount as the bottom90% in the last time it was like that inthe authorities are you kind ofsuggesting that we may be facing whathappened in the 30s years or no yes I’msaying you so that is why I’m sayingthere are three major divisions okaythree major forces and that force whichi think i emphasized the opportunity gapnot just the wealth gap but they bothmatter if you look at history acrosscountries across timeframesand you say when there’s a large incomeand wealth gap and you have an economicdownturn you have a dangerous fight onyour hands you have a dangerous set ofcircumstances history has taught us thatyou said in April income inequality isthe biggest crisis we have in America on60 minutes and I think in recent acouple months ago you said wealthinequality those are the two main thingsthat we ought to become I’m not sayingan even more fundamental those are theoutcomes and even more fundamental isopportunity in quality and productioninequality because at the end of the dayjust like you said we have to find how47:05