Ray Dalio’s Warning for America - The Long-Term Debt Cycle

"Ray Dalio points out that we saw with the United States back in the 1930s when the long-term debt cycle ended and started with England in the 1950s with Japan in the 1990s and with Spain and Italy back in the 2010 time characteristic number one is that people stop spending money that way they have more money to pay down their debts characteristic number two is you start to see more debt defaults because people can't afford all the debt they've taken on Number three you see deleveraging which is when people have to now sell off their assets things like stocks or real estate because they can no longer make their other payments and so now they're starting to sell off their assets to continue funding their Lifestyles which then causes asset prices to crash because now people are liquidating their stocks and real estate and other assets that way they can fund their other expenses and then number four the Federal Reserve Bank has to print more money to stimulate the economy and to make up for the loss of buying power through the loss of credit"

"Ray D says is no that's actually not what happens because you're actually printing money to fight deflation and the reason why ralo says this is because in our economic system remember we have money that you work to earn and then we have credit and when you go through this long-term debt cycle the down phase what happens is people start to lose their incomes and as you lose your income you lose your credit worthiness as you lose your credit worthiness people lose this in the economy we lose this base of money in the economy which is credit"

"when you go through this phase people start to make less money as people start to make less money as people start to make less profits the government generates less tax dollars so the government is generating less tax dollars during a time where the government needs more money because the government is funding more stimulus programs they're funding more growth in the economy that means the government has to create more money through the central banks or they have to tax their citizens more"

"according to rayalu and this is where what ralu says through his research is that in history what we have seen happen as said this is where now the government will then impose higher taxes on the wealthy as a way to then redistribute that wealth"

"if the Federal Reserve Bank starts to print too much money well then you risk hyperinflation so this has to be done the money printing has to be done to stimulate the economy in a way that fights deflation without creating hyperinflation so it has to be done in Balance because if you do too much you create hyperinflation the dollar becomes worthless and now you create a much bigger issue but if you don't do enough well then you run a very big economic crisis"

"understanding that if things go wrong which they will we know recessions happen we've seen 16 recessions in the last 100 years we know recessions happen when you see downturns in the economy use them as investment opportunities"