Famous Billionaire Says Era of Central Banks Is Ending, Praises Policy Makers and Welcomes a New Era

Stocks around the world this year have hit record highs, but Dalio considers this as the the beginning of the late-cycle phase of the business/short-term debt cycle


Ray Dalio: The “hedge fund king” with a net worth in 2014 “equivalent to more than 5 percent of Singapore’s GDP”

Hedge-fund investor Ray Dalio, who has a net worth of over $14 billion, says the global economy is going to a point where monetary policies are “reversing.” 

Dalio, chairman of Bridgewater Associates, the world’s largest hedge fund, says that stimulus and unconventional monetary will be tapered (reduced). 

The US has already tapered its controversial QE programs, but the European Central Bank is still exploring and continuing their stimulus and unconventional monetary policy like QE.

Stocks around the world this year have hit record highs, but Dalio considers this as “the beginning of the late-cycle phase of the business/short-term debt cycle, in which central bankers try to tighten at paces that are exactly right in order to keep growth and inflation neither too hot nor too cold, until they don’t get it right and we have our next downturn.”

Dalio also praised the central banks for their “beautiful deleveraging” and does not see a “big debt bubble bursting anytime soon.”

In his LinkedIn article, “Central Banks’ Reversals Signal the End of One Era and the Beginning of Another,” Dalio says that a taper is appropriate right now and that “we should savor this accomplishment and thank the policy makers who fought to bring about these policies.”

Dalio on policy makers: “They had to fight hard to do it and have been more maligned than appreciated. Let’s thank them.”

Looking through the comments on his LinkedIn article, one can see not everyone agrees.

Chris Beaulieu, Assistant Vice President, Head of Fixed Income at the Oregon-based financial insurance company, says that it is “silly to think this is a natural level for all assets. Central banks have taken trillions of assets off the market.”

The most popular comment with 13 likes so far was by Renaud Saleur, who has an MBA from Harvard Business School. Saleur says most people “have seen their savings and purchasing power decrease massively” while Dalio and others including himself “have over benefited from it.” He claims the recent central bankers have been the “worst central bankers in history and the responsible induviduals for the massive wealth destruction to come.”

So, what do you think? Leave a comment bellow.

Source: Dalio Calls End of Central Bank Era, Time to Head to Party Exit

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