This week Ray Dalio, American billionaire investor and founder of Bridgewater Associates, penned a LinkedIn post on the global economy titled "The World Has Gone Mad and the System Is Broken.” The post quickly went viral, garnering more than 13,000 likes and 1,500 comments.
Despite not a single mention of Bitcoin or blockchain, the post also made a splash in the crypto community.
In support of his claim that the global economy has reached insanity, Dalio details four key problems:
- Money is free. Dalio says those that are creditworthy can borrow money from investors who are willing to get back less than they give, and in many cases, not see a return for the foreseeable future. “They are doing this because they have an enormous amount of money to invest that has been and continues to be, pushed on them by central banks that are buying financial assets in their futile attempts to push economic activity and inflation up,” wrote Dalio.
- Government deficits are rising at an alarming rate. The amount of debt obtained by national governments will not diminish without raising interest rates, which, in Dalio's opinion, would cripple markets. He believes that instead of risking economic turmoil, central banks will buy the debt with freshly printed money.
- Healthcare and pension obligations will fall short. As baby boomers reach retirement age, the government will need to foot the bill of rising healthcare costs and pensions. Unfortunately, pension funds are unlikely to meet their promised returns, and there won’t be enough money to pay out the growing number of beneficiaries. Dalio says that in an attempt to pay for these programs, governments will have to: 1) cut benefits, 2) raise taxes, or 3) print money.
- The wealth gap is growing. While money for “the creditworthy” is virtually free, it’s nearly impossible for everyone else to access capital, further exasperating the wealth, opportunity, and political gaps.
While Dalio didn’t provide a clear solution to the issues global economies are facing, the crypto community was quick to insert Bitcoin. Tim Draper, an American venture capital investor, commented directly on the post.
Others remarked that the letter outlined all of the reasons Bitcoin exists, pointing to its fixed supply and decentralized governance as its strongest attributes.
I don't know about you, but in a world gone mad, I’ll sleep well tonight knowing Bitcoin exists.
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