Billionaire Investor Ray Dalio Says Capital Markets Are Not Free

Bridgewater CIO Ray Dalio claims capital markets are not free as central banks drive extra of the economic system.

Ray Dalio, the billionaire hedge fund supervisor and founder and chief funding officer of Bridgewater Associates, believes capital markets are not free.

Chatting with Bloomberg, Dalio stated markets have modified rather a lot so central banks just like the Federal Reserve not act inside the confines of the standard financial system.

“There are markets which can be pushed by central banks not solely their actions however their want to be an proprietor of these belongings. Their priorities about that possession after they purchase and after they promote are usually not the identical because the basic free-market allocations. And consequently, the capital markets are usually not free.”

He stated central banks, in regular instances, will put cash on deposit for banks to borrow and lend it to individuals who pays. This creates the credit score system and different monetary belongings compete with one another. Now, Dalio stated, the economic system and the markets are extra pushed by the possession of belongings by central banks.

He stated central banks discovered themselves in a scenario “the place they’re the market makers” after the 2008 Monetary Disaster and created the surroundings the place markets are not free. However, he identified, if the central banks didn’t permit lending to blue-chip corporations and fallen angels, then giant elements of the economic system might fall.

Dalio stated the U.S. greenback can also lose attractiveness as a result of as a reserve forex, the flood of money out there means the standard valuation of cash not exists. He has beforehand expressed considerations over the U.S. greenback’s function as a reserve forex.

Dalio is famously bearish on money however nonetheless has not thrown his weight in direction of different alternate options, like say cryptocurrencies. Dalio stated in April “money is sort of at all times the worst funding.” The billionaire has talked about bitcoin earlier than however felt cryptocurrencies are a lot too unstable to perform as a retailer of worth.

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