Billion Hedge Fund Manager Sees New “Big Debt Crisis”

“BIG DEBT CRISES” —  By Ray Dalio / 3 Volume Book

(New York) “Big Debt Crises” in the USA – Big Debt Cycles are nothing new, according to a new book of research from Ray Dalio, famed CEO and Founder of the largest Hedge-Fund in the USA. What is different today – Dalio states, that “investors, Corporations, Washington and local politicians, the Federal Reserve Central Bank – all will be blindsided- or worse.   “Populism and the gap between the Middle Class and the poor, fighting with the super-rich, has become a sport on T.V. and no solution to the underlying Debt issues in the USA, and the consumer spending economy has been addressed or fixed.”

  • Market Warning: 2019

Ray Dalio: “Everybody will be blindsided by a Crash- 10 year Bull Market Fever”

“The 10 year Bull Market in stocks has never happened before. The $ 21 Trillion in Debt is more than twice 10 years ago. There is significant risk now, of a major downturn – at a time that we have a political and social polarization.   The situation is very similar to the late -1930’s period, where Social unrest is a major threat to the capital markets.”

“The next Financial Crisis will be threat to Investors, Politicians, Capitalism and Democracy itself. We are in much worse shape than 2008 – the Too Big to Fail major banks are now much larger, as the Federal Reserve has provided Zero Interest money to the banks during the Obama Administration. $ 4.5 Trillion dollars have been printed, and the Banks have been bailed out of their debt, while the average citizen is saddled with more personal debt per household than the history of this country”

  • MARKET Debt Cycle Today:   2019

Mr Dalio says “prepare for the future, it is now.”     In fact, the famed billionaire has a more dire warning for investors:

“ I seen significant other problems ahead ,” Dalio said, “because of the combined effects of Debt, Pension and Unfunded Liabilities included Health Care Burdens – I believe it is over $ 100 Trillion in Debt or more in the USA – they say the Debt is $ 21 Trillion, that is incorrect and Political posturing to hide the bigger problem.”

  • MARKET Debt vs. Depression Era : 2019

Ray Dalio:      “Today is similar to the 1935-40 Cycle”

“The period in the past that is similar with today is 1935-1940 – the height of the Great Depression. In fact, we have developed a “Depression Meter” at our company, which signals indicators that can lead to a big downturn, a Recession and even Depression.   Indicators are very high – similar to before 2008 Financial Crisis—this why I wrote the book.\

Investors need to know these Debt Cycles are nothing new, the Federal Reserve Central Bank has even caused and made these cycles worse, in my opinion.   The Facts are there – the FED would not provide regional banks a Money Supply and banks closed between 1929-1933 at record rates.   The Federal Reserve did not act – Both former FED Chairman Bernanke and Chairman Greenspan have admitted publicly, that the Federal Reserve Central Bank caused the Great Depression. Yet, policies of creating DEBT through printing Money by the Federal Reserve, has reached an epidemic — worldwide now the Central Banks have followed the USA to a $ 22 Trillion Dollar total money printed – and Foreign Banks and Investors are drunk on zero interest rates, low rates on their US Dollar denominated debt. The case in point — Turkey had a currency crisis recently, losing 70% of its value, due to all the DEBT – loans based on the U.S. Dollar created in the last ten years since the 2008 crisis.   Debt Cycles must be watched by the investor, we are in the biggest Cycle ever.”

  • FIXING THE DEBT

The crisis of 2019 before us, is a Central Bank created dilemma.   Japan and the European Central Bank are still at zero or NEGATIVE interest rates, therefore “lowering rates in a crisis” which has always been done by Central Banks, is not possible.   Quantitative Easing, or QE, which is money-printing by the Central Banks and loaning to failing banks, corporations and purchases of “troubled assets” such as bad home loans, corporate bonds and securities now is a lot less effective. The Federal Reserve is now sitting on a huge balance sheet of troubled assets that they “bought” through created money supply from Too Big to Fail Banks. In Europe, the European Central Bank is still purchasing Corporate Bonds to prop up the stock markets of the EU and help the Euro survive.   “Fixing the Debt Crisis” this time, will need measures never before used – Social Unrest from the population has already begun.

 

 

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2018-12-02T23:32:48+00:00November 28th, 2018|Insights & Alerts|