I just want to leave this here for record, and my own purposes as I research but I came across this video.
After wondering why Trump is making changes so quickly…
Almost like he is on a time crunch, he just got into office January 20th, 2025
In my opinion, he is acting FAST…and have already made some changes…anyways this video below explains a bit as to the possible reasons why:
Just in case this video get’s taken down, I’ll summarize what I’ve learned:
Ray Dalio believes there are 5-major forces:
1. Money Debt Market Economy — Debt Issue Globally
2. Internal Order & Disorder Force — Greater Gaps & Conflict Like Civil War
3. Great World Power Conflict — Rise In Power Like China versus USA
4. Acts Of Nature — Killed More People Than Wars Have Like Floods, etc.
5. Man Inventiveness/Technology
Money Debt Market Economy:
is based on supply and demand, credit brings nutrients like allows people to buy things but also creates debt.
With credit comes interest rates, when it comes time to paying down the barrowed money, there is much more to pay back…hint why the US owes over trillion.
“One mans debt is another mans assets, BUT if those assets do not provide an adequate return or they feel that there is not enough demand for that asset, then there is a problem”
No matter what there is still debt owed…as Ray says, “imagine having an asset you thought were not good anymore…you’re going to want to sell those assets.”
Now what?
The central banks can let that happen, basically interest rates rise. Assets go down and the economy suffers.
OR they come in an print a lot of money (quantitative easing) which results in a monetary inflation.
So in this video, he also states that in the next three years the economy will suffer…due to the unbalance supply and demand (keep in mind, I am just going based on what I’ve learned)
Basically, debt is money and money is debt…if you have a supply and demand problem. Especially for those whom are holding the assets, and being selling. Interest rate will rise and a spiral will happen.
Rays says the deficit of GDP 7 1/2% if Trump tax cuts continue, but he believes is should be cut to 3%…he is quite SURE on that number actually.
I just wanted to add the Benner cycle there as reference, cause I find it interesting Ray keep mentioning that the cuts can happen within a 3-year period, and if it does not cut down to 3% that we will see a big problem.