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On Today’s Episode:
If you’re one that avoids economic news, politics, and global matters you may want to pause and lean into this conversation as an objective view of reality with historical context.
These are scary uncertain times we’re living through with an entire banking system failing, politics with one agenda to divide the country, and the battle for global power.
With the economic crisis unfolding before us, you have a decision to make on how you respond in this moment. No one can tell you what is best for you, but as Ray Dalio puts it, he wants you to at least understand the mechanics of what is happening so you can do your own analysis of what’s best for you.
Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater, a billionaire investor, and bestselling author, joins Tom for a sobering conversation about the obvious problems with banking causing its collapse and the moment in time we’re facing with global conflicts on the rise.
The emphasis is on understanding the mechanics and knowing what to look for and how you’ll respond. Ray shares valuable insights on the way banking works, why the collapse of SVB was obvious, the 6 cycle trend that sees the rise and fall of empires, and 3 tiers of security you can put in place for yourself.
Ray Dalio has decades of experience, knowledge, and learnings he’s put together his books, Principles: Life and Work, Principles for Dealing with the Changing World Order, and video content he’s made freely available on his YouTube channel for everyone that values truth and radical honesty.
Check out Ray’s video mentioned in this episode, Principles for Dealing with the Changing World Order:
QUOTES:
“One man’s debts are another man’s assets.”
“It’s not safe because I’m losing money to inflation.”
“We know we’re going to have financial problems and economic problems at the same time that we have this internal fighting and this external risky situation.”
“When we think about safety we have to think about that as purchasing power.”
“You as an individual should think about the total safety, including maybe that terrible scenario doesn’t happen, and if you do that you will come to a better balance decision.”
“To be financially strong requires you to not spend more than you earn.”
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BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
ECONOMIC CRISIS: Ray Dalio’s Warning For The Banking Collapse, US Dollar & Upcoming Recession
In recent months, renowned investor and Bridgewater Associates founder Ray Dalio has been sounding the alarm about an impending economic crisis. Dalio, who accurately predicted the 2008 financial crisis, has been warning of an even more severe collapse that may be on the horizon. His concerns center around the fragility of the banking system, the vulnerabilities of the US dollar, and an upcoming recession. These warnings carry weight and should be heeded by policymakers and investors alike.
Starting with the banking sector, Dalio points out that banks’ profitability is under significant pressure due to low-interest rates and anemic economic growth. As a result, there is a growing risk of widespread bank failures, which could trigger a cascading effect throughout the global financial system. The impact would be felt not only within the banking industry but also in the real economy, leading to reduced lending, job losses, and decreased consumer spending.
Dalio’s concerns about the US dollar stem from the substantial levels of debt the US government has accumulated over the years. With debt levels reaching historic highs, there is a very real risk of a dollar devaluation. A weaker dollar would decrease the purchasing power of Americans and lead to inflationary pressures, particularly considering the current loose monetary policy pursued by the Federal Reserve. Moreover, a devalued dollar would also have profound implications for the global economy since it serves as the world’s reserve currency.
The upcoming recession that Dalio anticipates is a natural consequence of the economic imbalances and excessive debt levels that have built up in recent years. The COVID-19 pandemic has only exacerbated these underlying issues, leading to a deepening divide between asset prices and the real economy. The stock market’s remarkable recovery amidst the pandemic-induced economic downturn has fueled concerns of a potential bubble that could burst, leading to a significant market correction.
Making matters worse, the global economic landscape is increasingly characterized by rising geopolitical tensions and trade disputes. The US-China trade war has been a significant driver of uncertainty, and ongoing conflicts could further destabilize markets and negatively impact global growth. The ramifications of these geopolitical risks on the global economy must not be underestimated.
Amidst these warning signs, it is crucial for governments and central banks to take proactive measures to mitigate these risks and protect their economies from the impending storm. Policymakers should aim to strengthen the financial sector by imposing stricter regulations, stress testing banks to ensure their resilience, and promoting responsible lending practices. Additionally, governments should explore ways to reduce their debt burdens and address structural issues that inhibit sustainable economic growth.
For individual investors, Dalio’s warnings serve as a reminder of the importance of diversification and risk management in their portfolios. Allocating investments across different asset classes and geographic regions can help mitigate the impact of a potential downturn. Moreover, considering alternative investments, such as gold or cryptocurrencies, may provide a hedge against currency devaluations and market volatility.
Ray Dalio’s predictions and warnings carry weight due to his track record and deep understanding of economic cycles. The risks he highlights regarding the banking collapse, the US dollar, and an upcoming recession should be taken seriously. By heeding these warnings, governments, central banks, and individual investors can better prepare for the challenges that lie ahead and work towards building a more resilient and stable global economy.
The financial system has been artificially pumped for over a decade to ensure big pockets were lined; and now those same hands will make a fortune in the largest transfer of wealth in human history by shorting it on the way down. Inflation does have a roll, but that's to keep everyone panicked, and focused on their bills and expenses, rather than focus on the capital crimes of politicians and corporations, I'm still at a crossroads deciding if to liquidate my $330k stock portfolio, what’s the best way to take advantage of this bear market??
I WISH YOU COULD CHEER UP RAT .
I'VE ADMIRED & RESPECTED YOU AS ONE OF THE FEW MONIES WHO KEPT CONVENTIONAL & DISCREET . PWW
Major indexes booked their worst yearly performance since 2008 thanks to drivers like the recession, war, hiked interest rate and inflation which so far doesn’t seem to be easing off, so I’m left wondering what 2023 has in store for us investors, I’ve been sitting on over $745K equity from a home sale and I’m not sure where to go from here, is it a good time to buy or do I wait?.
Make sure to pay off your house and buy physical real estate and physical gold. As far as stocks make sure to own some defense companies like LMT and NOC. If another MAJOR war breaks out they will probably go up enough to make up for the rest of your stocks.
Our Founding Fathers knew goddam well that printing money out of thin air leads to disaster.
He’s keenly aware of how income discrepancies affect all things, children from day included. At the same time he sits on top of 20 billion dollars of personal wealth.
Gives a specific example of drop out rates and the reasons why, which can be significantly curbed with money, as if he’s just a spectator and not part of the problem. He is.
The amount of spam in the comments is overwhelming
One thing that is left unsaid in the debt conversations is; How is the USA able to issue so much debt? The answer as Dalio says is demand. The capability to do it comes from replacing the high rate debt issued in the early 1990's. I remember the treasury issuing 9's that gained in price when the first Iraq war was initiated to liberate Kuwait. When you issue 30 year debt at 3% you can issue 3x as much debt and still have the same interest cost. The problem arises when rates rise again (5% interest on 30T is 1.5T). With federal revenue just going through 4T, 1.5T is a big percentage for debt service. The reason federal revenue has increased recently is due to Tariffs. Hence while the tariffs the DNC was so vocal about in the last presidential election have not been removed.
This brings in the issue of treasuries having to yield 10% to attract enough people to buy the debt…….The Federal Reserve bank needs to raise rates, increase reserve requirements and stop buying treasuries (printing money) if they are ever going to be serious about inflation going down. The CRB index is ~300, it was ~210 pre-pandemic print fest.
Another issue unspoken is that the USA is not Aaa and not Aa rated by any metric. The standard for any country by S&P and Moody's back in the day was 'if debt >= GDP' they can not be investment grade. That means not BBB-.
After S&P were attacked legally for improper ratings on MBS after 2008, Moody's, Fitch and S&P understood not to downgrade the USA after this.
There are many other factors your speakers mention encompassing what I say but some mechanics are helpful for people to grasp.
It is currency! Not money!
I don't think funding is the solution. It hasn't worked for us so far and a better argument can be made for it making things worse. A prime example of one problem is the housing crisis in California. The money never trickles down to the people who need it. The ppl they hire to manage it take all of it. Another example is LBJs policies to incentive women to have children out of wedlock and if married then they are incentived to divorce. Then you have boys being raised by only women. Many times this is the reason men are not equipped for life. A woman's struggles in life are often very different struggles. I don't know how many times I've heard women say where are the real men. Well this is 1answere.
My question is what happens when we stop all the free money, because we can no longer print money? Like SS checks, food stamps, 70 percent of our health care is from printing money or taxes? VA lowered hiring veterans by 30 percent since 2000, yet VA expenditures went up 185 percent. Seriously too many people working the system. What happens when this collapses?
Hold hard assets. That is why Bill Gates is buying land.
Banking collapse and corruption
I know they were simplifying but In reality when a bank gets $10 they don’t loan out $9 they loan out $90 in essence the banks create money every time someone deposits
what's with the weird cuts when guests are promoting their stuff? i've seen that a bunch of your videos. Seems disrespectful to the guest.
Recession is most likely the result of an external factor. For the first time in decades, the United States is losing its clout as a federal reserve currency. They don't have any more economies to use to control inflation, and less money is being spent on stock and oil trading than in the past. They all lend support to the idea that a new multilateral world order is in the works.
Tom tries, but he's not as smart as he thinks he is. Glasses notwithstanding.
According to certain economists, it's possible that the U.S. and certain parts of Europe might experience a recession at some point in 2023. Although a global recession, which is characterized by a decline in annual global per capita income, is relatively uncommon due to the faster growth rates of emerging markets like China, in comparison to developed economies. I have pulled out more than $340k from my bank. After all, the FDIC covers only up to $250,000, and the implosion could have bad effect. Looking to invest into the stock market now. Does anyone know how I could go about it?
US dollar is not under attack. It is being abandoned by the world it has been attacking and cheating by the fed printing machine.
Fiat money. Fiat stands for fix it again tony.
All Stores Please lower the price of all Military and Local for all brands of Economy Products and Accessories and Production Cost Now That's too much $$ The Whole World Now pray
ATD is the gem that doesnt get the attention it deserves.
This time IT WILL NOT BE A CYCLE. IT IS TOTAL COLLAPSE!!!
This dude is a democrat, and is big friends with Gov. Lamont. He is a gun-grabber. Don't believe a word coming out of his mouth.
When is someone truly going to shatter the antiquated two party radically divisive political system in place across the western world. Can that ever truly be overcome
I know what's right. This guy is a small percentage GateKeeper.
If you do not hold it, you do not own it.
Get out of Federal Reserve notes. Fiat is cyclic. It is made to fail. Federal Reserve is private, run for-profit there's nothing Federal about it other than the scheme.
This is a time of declared war and a National Emergency, this country is absolutely infiltrated with CCP warring factions. As per the DoD law of War manual, CCP proxies will be hung in public.
Get out, and stay out of the hyper-inflated, make-believe stock-market! Are you serious? Have you heard of the manipulation of the Libor rate? Have you heard of the plunge Protection Team?
You are being gamed like children!
This is about to go kinetic.
Russian and Chinese nuclear subs are off the east and west coasts. Busloads of CCP war units are coming over the southern border by the busload, unfortunately, literally.
Your purported representation is nothing more than an assisting coup apparatus whereby keeping the lawful American citizenry sedate and dumbfounded. Glued in front of their personal prisoner tracking units.
This Is gray, irregular, proxy Warfare!
War!
Act accordingly.
Your enemy is.
This is the greatest history lesson
I am aware that continuing to invest during periods of volatility can be a smart way to build wealth. I’ve heard testimonies of people accruing over $250k in this red period. What measures can I take to achieve this?
Nobody can become financially successful over night. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking bold steps we need in other to reach our goals…
Why are you scared to talked about the number of war the US have created or encouraged.
America is a third world country