Ray Dalio released new text

Another classic example that comes to mind is that extended periods of low volatility tend to lead to high volatility because people adapt to that low volatility, which leads them to do things (like borrow more money than they would borrow if volatility was greater) that expose them to more volatility, which prompts a self-reinforcing pickup in volatility. There are many classic examples like this that repeat over time that I won’t get into now. Still, I want to emphasize that understanding which types of paradigms exist and how they might shift is required to consistently invest well. That is because any single approach to investing—e.g., investing in any asset class, investing via any investment style (such as value, growth, distressed), investing in anything—will experience a time when it performs so terribly that it can ruin you. That includes investing in “cash” (i.e., short-term debt) of the sovereign that can’t default, which most everyone thinks is riskless but is not because the cash returns provided to the owner are denominated in currencies that the central bank can “print” so they can be depreciated in value when enough money is printed to hold interest rates significantly below inflation rates.

In paradigm shifts, most people get caught overextended doing something overly popular and get really hurt. On the other hand, if you’re astute enough to understand these shifts, you can navigate them well or at least protect yourself against them. The 2008-09 financial crisis, which was the last major paradigm shift, was one such period. It happened because debt growth rates were unsustainable in the same way they were when the 1929-32 paradigm shift happened. Because we studied such periods, we saw that we were headed for another “one of those” because what was happening was unsustainable, so we navigated the crisis well when most investors struggled.

how will paper gold be worthless??
SPDR Gold Shares (GLD) is backed by 24 million ounces of gold ($31 billion)

unless you are talking about a doomer scenario where tyrannical government seize gold 3rd parties are holding for you, so you would need to be holding it yourself

I think now is a good time 1) to look at past paradigms and paradigm shifts and 2) to focus on the paradigm that we are in and how it might shift because we are late in the current one and likely approaching a shift. To do that, I wrote this report with two parts: 1) “Paradigms and Paradigm Shifts over the Last 100 Years” and 2) “The Coming Paradigm Shift.” They are attached. If you have the time to read them both, I suggest that you start with “Paradigms and Paradigm Shifts over the Last 100 Years” because it will give you a good understanding of them and it will give you the evolving story that got us to where we are, which will help put where we are into context. There is also an appendix with longer descriptions of each of the decades from the 1920s to the present for those who want to explore them in more depth.

Part I: Paradigms and Paradigm Shifts over the Last 100 Years
History has taught us that there are always paradigms and paradigm shifts and that understanding and positioning oneself for them is essential for one’s well-being as an investor and beyond. The purpose of this piece is to show you market and economic paradigms and their shifts over the past 100 years to convey how they work. In the accompanying piece, “The Coming Paradigm Shift,” I explain my thinking about the one that might be ahead.

Due to limitations in time and space, I will only focus on those in the United States because they will suffice for giving you the perspective I’d like to convey. However, at some point I will show you them in all significant countries in the same way I did for big debt crises in Principles for Navigating Big Debt Crises because I believe that understanding them all is essential for having a timeless and universal understanding of how markets and economies work.

How Paradigms and Paradigm Shifts Work

As you know, market pricing reflects expectations of the future; as such, it paints quite detailed pictures of what the consensus expectation of the future is. Then, the markets move as a function of how events transpire relative to those expectations. As a result, navigating markets well requires one to be more accurate about what is going to happen than the consensus view that is built into the price. That’s the game. That’s why understanding these paradigms and paradigm shifts is so important.

>gld is backed
>what is rehypothecation?
you understand about that word, dont ya?

I have found that the consensus view is typically more heavily influenced by what has happened relatively recently than it is by what is most likely. It tends to assume that the paradigms that have existed will persist and it fails to anticipate the paradigm shifts, which is why we have such big market and economic shifts. These shifts, more often than not, lead to markets and economies behaving more opposite than similar to how they behaved in the prior paradigm.

What follows is my description of the paradigms and paradigm shifts in the US over the last 100 years. It includes a mix of facts and subjective interpretations, because when faced with the choice of sharing these subjective thoughts or leaving them out, I felt it was better to include them along with this warning label. Naturally, my degree of closeness to these experiences affects the quality of my descriptions. Since my direct experiences began in the early 1960s, my observations of the years since then are most vivid. While less vivid, my understanding of markets and economies going back to the 1920s is still pretty good both because of my intense studying of it and because of my talking with the people of my parents’ generation who experienced it. As for times before the 1920s, my understanding comes purely from studying just the big market and economic moves, so it’s less good though not nonexistent. Over the last year, I have been studying economic and market moves in major countries going back to about the year 1500, which has given me a superficial understanding of them. With that perspective, I can say with confidence that throughout the times I have studied the same big things happen over and over again for essentially the same reasons. I’m not saying they’re exactly the same or that important changes haven’t occurred, because they certainly have (e.g., how central banks have come and gone and changed).

To show them, I have divided history into decades, beginning with the 1920s, because they align well enough with paradigm shifts in order for me to convey the picture. Though not always perfectly aligned, paradigm shifts have coincidently tended to happen around decade shifts—e.g., the 1920s were “roaring,” the 1930s were in “depression,” the 1970s were inflationary, the 1980s were disinflationary, etc. Also, I believe that looking at

10-year time horizons helps one put things in perspective. It’s also a nice coincidence that we are in the last months of this decade, so it’s an interesting exercise to start imagining what the new ‘20s decade will be like, which is my objective, rather than to focus in on what exactly will happen in any one quarter or year.

Before briefly describing each of these decades, I want to convey a few observations you should look out for when we discuss each of them.

Every decade had its own distinctive characteristics, though within all decades there were long-lasting periods (e.g., 1 to 3 years) that had almost the exact opposite characteristics of what typified the decade. To successfully deal with these changes, one would have had to successfully time the ins and outs, or faded the moves (i.e., bought more when prices fell and sold more when prices rose), or had a balanced portfolio that would have held relatively steady through the moves. The worst thing would have been to go with the moves (sell after price declines and buy after price increases).

The big economic and market movements undulated in big swings that were due to a sequence of actions and reactions by policy makers, investors, business owners, and workers. In the process of economic conditions and market valuations growing overdone, the seeds of the reversals germinated. For example, the same debt that financed excesses in economic activity and market prices created the obligations that could not be met, which contributed to the declines. Similarly, the more extreme economic conditions became, the more forceful policy makers’ responses to reverse them became. For these reasons, throughout these 10 decades we see big economic and market swings around “equilibrium” levels. The equilibriums I’m referring to are the three that I provided in my template, which are:
1) Debt growth that is in line with the income growth that is required to service debt;

2) The economy’s operating rate is neither too high (because that will produce unacceptable inflation and inefficiencies) nor too low (because economically depressed levels of activity will produce unacceptable pain and political changes); and

3) The projected returns of cash are below the projected returns of bonds, which are below the projected returns of equities and the projected returns of other “risky assets” (because the failure of these spreads to exist will impede the effective growth of credit and other forms of capital, which will cause the economy to slow down or go in reverse, while wide spreads will cause it to accelerate).

fuck it way too much text

Dalio is a brainlet who went to a shitty undergraduate college LARPing as some kind of intellectual. He got lucky during a runaway bull market

Because (((they))) never commit fraud on a massive scale.

he performed exceptionally well during the 2008 crisis, also 2018 whereas most hedgefonds performed bad.

he doesnt have the biggest hedge fund ever for no reason. read his book and how he became the person he is today. luck has nothing to do with it

Trump will win in 2020. The economy will continue to soar. A hard left progressive will win in 2024, the markets will react negatively, and the next financial crisis will begin before they even take office.

luck seems to happen more to those who work hard, funny that. I'll have to look into this guy Dalio, he seems to know his shit.

>and the US beginning a war in Asia in 1941
Dalio confirmed redpilled on The FDR Question

>lucked into 18 billion dollars
>the only difference between retard user and Ray Dalio is that one was unlucky and the other was lucky

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>For these reasons, I believe that monetizations of debt and currency depreciations will eventually pick up, which will reduce the value of money and real returns for creditors and test how far creditors will let central banks go in providing negative real returns before moving into other assets.

>To be clear, I am not saying that this shift will happen immediately. I am saying that I think it is approaching and will have a big effect on what the next paradigm will look like.

Dalio confirmed all-in on the REAL Bitcoin (Bitcoin Cash).

Luck definitely has something to do with it. I'm not trying to take away from what he's done but there is a lot of people as smart and hard working as him but he was the lucky one

what if im broke as fuck and cant buy gold? should i just join a guerilla?

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>what if im broke as fuck and cant buy gold?

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Not him but personally life hasn't been very kind.

Fate not dealing you a perfect set of cards just means you won't become the next Zuckerberg, Trump, or Gates. Big fucking deal.

Doesn't mean you can't unfuck your broke ass.

Crypto is all you need.

lmao scares shitless

This is what Bitcoin was made for in 2009.
And that Bitcoin is still going, it's just called Bitcoin Cash
------
"It's not going to happen that fast, surely," (2) said.

"Maybe, maybe not," I said. "With the state of the global financial system at the moment it's very clear governments, financial institutions, banks and central bankers really have little idea of what they're doing. They're all experts who are repeating each other like parrots. I'm sure they can all wave a book in the air and say ‘this other expert says I'm right'."

"That's great for us, right ?" (2) said. "With the financial systems broken and in disarray this is the perfect time for a workable electronic cash."

"For this crisis ? No," I said. "It'll take us time to work out the implementation details and create working code. Then it'll take even longer to build up a decent network and start getting value into the system. It's not this financial crisis that Bitcoin is being built for. It is to be built to handle to next Global Financial Crisis."

"And when will that be ?" (2) asked.

"If you look it up," I said, "There have been recessions every 10 years or so for the past few decades. As this one started in 2007/2008 we should expect another around 2017/2018. But it could start before 2014 or after 2020. We really don't know. We just know it will happen. This is when Bitcoin must be fully tested and be able to expand to meet the demand when everything gets screwed up by these experts again. However this time, they will be taking the retirement savings of the Baby Boomers and lumbering the cost of their retirement onto everyone else. The Baby Boomers include these self same experts. This time we need to be able to say no to these experts and allow folks around the globe to exit their local financial system."

"So back to making Bitcoin a scarce resource deflationary system," (2) said.

do you even math brainlet? yes it can totally be luck. If all fund managers were picking heads or tails, a small percentage of them would be correct more than 10x in a row. We would call this skill when it's only luck

I'm trying, but it's hard and I'm apparently not very good at it.

> t. a faggot who still believes what school you went to matters in the real world....

You're never gonna make it bro, just quit now before you get laughed at and eggs thrown at you.

>I have observed there to be relatively long of periods (about 10 years)
>There are always big unsustainable forces that drive the paradigm. They go on long enough for people to believe that they will never end even though they obviously must end
>In paradigm shifts, most people get caught overextended doing something overly popular and get really hurt
this perfectly matches bitcoin being the first, even the time period.
(interestingly, ray dalio compared bitcoin to blackberry elsewhere and said that ethereum has a chance at becoming the biggest).

the point is, he failed already several times and made it back big from zero. i refuse to call this luck, it's called learning and he does exceptionally well from then on.

trump just had an rich dad, he gambled away everything and then blackmailed people with the huge amount of debt, he was lucky that reality tv was a thing back then.

So he's saying sovereign debt is going to grow, central banks will inflate heavily, taxes will increase, stocks are overvalued due to repurchases with cheap debt, bonds are going to get fucked, and gold will do well. Methinks BTC will also due well