Ray Dalio has probably been the most interesting man on Wall Street over the last six months. The billionaire investor has provided some interesting analysis that is difficult to find on Wall Street – some of it good, some of it not so good.
For the latest chapter of his upcoming book, Dalio wrote in an appendix on Thursday that money-printing is the easiest way to resolve the debt crisis.
He wrote:
“Printing money is the most expedient, least well-understood, and most common big way of restructuring debts. It’s like playing Monopoly in a way where the banker can make more money and redistribute it to everyone when too many of the players are going broke and getting angry.”
Dalio added that printing money makes people feel “good rather than bad” since austerity, defaults, and taxation can produce a lot of anxiety in the overall economy.
“It’s tough to identify any harmed parties that the wealth was taken away from to provide this financial wealth, and in most cases it causes assets to go up in the depreciating currency that people use to measure their wealth in so that it appears that people are getting richer,” Dalio wrote. “You are seeing these things happen now in response to the announcements of the sending out of large amounts of money and credit by central governments and central banks.”
He is spot on when he states that nobody is complaining about money and credit creation, noting that those championing monetary expansion say “the government would be cheap and cruel if it didn’t provide more.”
You could say these are the confessions of a Wall Street insider.
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