Does Fed Policy Have an Effect on the Economy?

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Christina romer claims a lot of down turns are the result of fed contractions. Jim hamilton claims that some down turns areThe result of high oil price shocks. And you have a theory of debt cycles. How do you see that landscape? I think that there's goods and services that exist in a certain quantity, and then there's amount of money and credit, and they interact. But to answer your question about do oil shocks or fed policy have an effect, the answer is both.

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When Ray Dalio was 23, President Nixon announced that the United States would no longer be adhering to the gold standard for American currency. Clerking on the floor of the New York Stock Exchange, Dalio expected to see chaos—but instead stocks soared. Curious to understand this phenomenon, he began to read about similar events in 1933, and it opened his eyes to the lessons that could be drawn from history. His latest book draws on the patterns he’s gleaned from studying dynasties and empires throughout time, as well as his own experiences as a hedge fund manager and founder of Bridgewater Associates.

Ray joined Tyler to discuss the forces that will affect American life in the coming decades, why we should be skeptical of the saliency of current equities prices, the market as a poker game, the benefits and risks of the US dollar as the world reserve currency, why he thinks US inflation will not be transitory, the key to his success as an investor, how studying the Great Depression enabled him to anticipate the 2008 financial crisis, Bridgewater’s culture of radical transparency, the usefulness of psychometric profiles, where the United States is falling short most in terms of moral character, his truth-seeking process, the kinds of education crucial to building a successful dynasty or empire—and what causes them to fail, how transcendental meditation helps him be creative and objective, what he loves about jazz music, what we undervalue about the ocean, why he loves bow-hunting Cape Buffalo, and more.

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Recorded November 5th, 2021 Other ways to connect

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