The World Has Gone Mad and the System Is Broken - Ray Dalio

Ray Dalio believes the world is heading towards a big paradigm shift. Central banks have injected an enormous amount of money into the world, pushing up asset prices across the board without having any meaningful effect on economic growth or inflation. Government deficits are substantial and rising, healthcare and pension obligations are increasingly coming due without the ability to satisfy them, and inequality gaps are widening due to asset inflation, technological advances, and lack of credit for the “have nots.” According to Dalio, as debt monetization becomes the easiest option for governments to deal with unmeetable debt obligations, the viability of the three major world reserve currencies as viable stores of wealth will be threatened. The paradigm we are in is unsustainable and can no longer be kicked down the road as is has been since 2008.

Why it matters:

• The convergence of the Bitcoin and Macro investment communities has been one of the larger stories of 2019. Bitcoin’s appeal as a potential safe haven asset and store of wealth is fundamental to institutional adoption of Bitcoin as a macro asset and if more institutional investors begin to arrive at Dalio’s view of our current macro environment we could see an uptick of interest in Bitcoin as a potential hedge to the current environment.
• If Dalio’s view holds true it may be time for Bitcoin ($BTC) to take center stage and prove its value. As the current economic cycle plays out Bitcoin may need to face its most important outstanding question to date: can Bitcoin perform well as a safe haven asset?