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The superstar investor and sometime bitcoin (BTC) commentator, founder of major global investment firm Bridgewater Associates Ray Dalio has launched a stinging attack on government and other forms of dollar debt-buying in the form of bonds, labeling the practice “stupid” – and urging followers to buy “stuff” that provides a safer bet against inflation.
Dalio published a long-form post on his LinkedIn page, where he opined that “the economics of investing in bonds” as well as “most financial assets” has “become stupid,” adding,
“Rather than get paid less than inflation why not instead buy stuff – any stuff – that will equal inflation or better?”
He made specific mention of BTC, opining like many others of late that governments would likely come calling for asset classes such as crypto (possibly using one of these strategies). Dalio wrote,
“Policymakers who are short of money will raise taxes and won’t like these capital movements out of debt assets and into other storehold[s] of wealth assets and other tax domains. ?? According to Bank of America's Global Fund Manager survey, inflation now is considered the biggest tail risk, according to senior portfolio manager Jeroen Blokland at an international asset manager named Robeco. My opinion is that this is a new paradigm.” (Learn more: The G7 Taxman Is Coming for Your Crypto Profits)
There are few risks of overshooting.
He concluded that assets in “mature developed reserve currency countries” would “underperform” against “Asian (including Chinese) emerging countries’ markets, adding that “one should be mindful of tax changes and the possibility of capital controls, and writing,
“The environment can become inhospitable to capitalists leading them to run from less hospitable places to more hospitable places. I think this is the new paradigm.”
On Twitter, the outspoken MicroStrategy chief and bitcoin bull Michael Saylor signaled that he was in partial agreement with Dalio, but once again took the opportunity to sing the praises of BTC, an asset that his company has been buying up at a rate of knots.
He wrote that Dalio was correct to opine that bonds no longer work as a treasury asset, but added,
“Respectfully, bitcoin is the obvious solution, and much more practical than ‘a well-diversified portfolio of non-debt and non-dollar assets’ in ‘Asian emerging markets.’”
Meanwhile, inflation is now considered the biggest tail risk, Jeroen Blokland, Senior Portfolio Manager at Robeco, an international asset manager, said, citing Bank of America’s Global Fund Manager survey.
It is not likely to overshoot.While inflation risks have increased in the US, it hasn't yet begun to derail equity markets,?? he added. I think it’s too early to be worried about inflation, though,It is not likely to overshoot. Blokland said in a blog post.
In the New Decade, what can be expected in the way of an increase in debt and the rise in Bitcoin?
It is not likely to overshoot.Overshooting risks are low. In the US, inflation risks are higher, but not enough yet to derail equity markets,It is not likely to overshoot. he added.
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Learn more:
- Bridgewater's Ray Dalio Sends Stronger Bitcoin Signal
- Will Joe Biden's Stimulus Plan Cause the US Economy to Overheat?
- Undetected Inflation: Your Fiat Money Devalues Faster Than You Think
- This Is Why 'Hedge Against Inflation', Bitcoin, Dropped On Inflation Fears
- The Evidence Is in on Negative Interest Rate Policies
- Global Uncertainty Drops But Is Still 50% Above Historical Average
- Davos Watch: 'Don't Take Things For Granted For The Next Decades'
- Governments Paralyzed by Pandemic and Politics Are Bullish for Crypto
- Crypto in 2021: Bitcoin To Ride The Same Wave Of Macroeconomic Problems
