3 ms·
Detailed descriptions of ~50 debt crises that had happened in the past century, both deflationary like the 2008 subprime crisis in the US and much of the world,
by H8crilA 7y ago
Detailed descriptions of ~50 debt crises that had happened in the past century, both deflationary like the 2008 subprime crisis in the US and much of the world, and inflationary like the 1930s Weimar Republic hyperinflation can be found in Ray Dalio's book "Principles for Navigating Big Debt Crises". The main determinant of whether a debt crisis becomes deflationary vs inflationary is whether the debt is denominated in local currency (and can therefore be managed/socialized via money printing, like QE after 2008, or the Roosevelt's Executive Order 6102 in 1933 with the follow-ups) or in a foreign currency (when the debtor country cannot do so). Only borrow in a currency in which you earn! This applies to governments too.
There's also a good 30 minute video on the topic:
How The Economic Machine Works: https://www.youtube.com/watch?v=PHe0bXAIuk0 https://www.youtube.com/watch?v=PHe0bXAIuk0
- littlestymaar 7y ago> How The Economic Machine Works: https://www.youtube.com/watch?v=PHe0bXAIuk0 https://www.youtube.com/watch?v=PHe0bXAIuk0 First sentence “The economy works like a simple machine, but many people don't understand it − or they don't agree on how it works − and this has led to a lot of needless economic suffering”. Seriously?
- qubex 7y agoAs an economist, any suggestion that the economy is simple, mechanistic, or easy to understand horrifies me... and those who perpetrate such views tend to be the ones who cause the most harm by simplifying things down to the point that they are meaningless and drawing vast, general conclusions from basically anecdotes.
- H8crilA 7y agoWell, the guy is the most successful hedge fund manager in history, so perhaps he knows what he's talking about, since he was betting on the outcomes of such events for the past 50 years. And of course it's simplified.
- thedudeabides5 7y ago@H8crilA how dare you suggest that a traditional finance person (and a successful one at that) have anything useful to say on history or finance. Didn’t u hear that stripe just raised at $35bn? Has Ray ever raised at that valuation, no? Downvote!
- H8crilA 7y agoHeh, he has >100B under management, so he indeed raised more. Much more. :)
- airbreather 7y agoGiven you are a self acknowledged economist, I am aghast that you feel the empirical track record of your ilk entitles you to comment.
- qubex 7y agoYeah... I consider it an error of youth that I’m now stuck with.
- Amezarak 7y agoWeimar Germany experienced hyperinflation in the early 20s. The 1930s are when severe deflation and massive unemployment hit, leading to political crisis.
- H8crilA 7y agoRight! Sorry.