Three Major Forces
Dalio says this model has guided Bridgewater for over 30 years, and that there are three major forces that shape the economy:
1. Productivity Growth
Productivity growth, which is measured as a percentage of GDP, grows over time as knowledge, technology, and innovations help to raise our productivity and living standards.
2. Short-Term Debt Cycle
Usually lasting 5-8 years, the short-term debt cycle is a repeating pattern that occurs as credit expands and contracts.
3. Long-Term Debt Cycle
Usually lasting 75-100 years, the long-term debt cycle usually ends in a period of extreme deleveraging, where global debt is unsustainable and asset prices fall....Visual Capitalist
Video: How the Economic Machine Works, According to Ray Dalio
Jeff Desjardins
2 comments:
“the short-term debt cycle is a repeating pattern that occurs as credit expands and contracts.”
Yes like it has a mind of its own...
Dallo states that deleveraging takes a decade or so. Hitler did it in a couple of years by SPENDING! Hitler became popular, even among workers, because Schacht gave everyone a job by 1935: two years, not a decade!
Then, starting in 1941, FDR did it in one year by SPENDING! He gave everyone a job!
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