Billionaire investor Ray Dalio’s upcoming book, “The Changing World Order” attempts to explain how “money, credit and debt work” by sharing his work with historians and political experts to “connect pieces of the past together to better understand the future.” This according to a recent article in Bloomberg.
Dalio delves into the meaning and impact of money, arguing that most currency has no intrinsic value, does not represent wealth, and typically ends up getting devalued and destroyed by the actions of central banks. He notes, “The Federal Reserve is now in the strong but awkward position of running its monetary policy in a way that is good for Americans but that might not be good for others around the world who are dependent on dollars.”
Here are some of Dalio’s thoughts on the subject:
- “One cannot create more wealth simply by creating more money and credit. To create more wealth, one has to be more productive.”
- “There is nothing wrong with having an increase in money growth instead of an increase in credit-debt growth, provided that the money is put to productive use.”
- “History has shown us that we shouldn’t rely on governments to protect us financially. On the contrary, we should expect most governments to abuse their privileged positions as the creators and users of money.”
- “Printing money to buy debt (called debt monetization) is a vastly more politically palatable as a way of getting money and shifting wealth from those who have it to those who need it than imposing taxes, which leads taxed people to get angry.”