"...about what I use -- to be technical. the word is an evocative word, and it can be scary and so on. So what do you mean by a depression? Ok? Something like happened in the 1930s. So just to repeat, 1929 to 1932, there was a fall in the economy. Double digit unemployment..."
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"...and a magnitude of fall in the economy like, about 10 percent."
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"...do I think we're in that? Yes." "How was that dealt with, 1933? What they did is they printed a lot of money. And the government came out with the same type of programs that we're having now. Same thing." "Interest rates hit zero. Same thing!"
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"Same thing, OK, same dynamics." "And the, there is -- the money causes an expansion from that point." "How long does it take for the stock market (or the economy) to exceed its highs? A long time. OK." "Do I think that's what we're in? Yes, that's what we're in."
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"We've seen that happen repeatedly in history. Saw it many, many times, it's just the most recent one. And there's a structure to that." "So yes, this is *not* a recession. This is a breakdown. An operation that I'm just describing in terms of how it's dealt with..."
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"the *production* of money and credit and all of that. That's what we're in."
@RayDalio#FinTwithttps://youtu.be/yrxYhv2O3wU?t=531 …Show this thread -
"...the greatest force is the force of adaptation and inventiveness if we can operate well together. It will pass, the world will be very different, there'll be a new world order. Because what we're dealing with now is just money and credit," "Money and credit is just digital"
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"I mean, there's no -- there's real goods and services, those are real. But everything else, is just accounting. And so when you change the digits, and you work those things out, and you work yourself through, that takes, you know, a couple of years at most..." TBH I disagree...
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we have to solve the pandemic and it's massive.
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TED (Chris Anderson): "So do you see systemic threats tot he financial system that are bigger than what happened in 2008?" Ray Dalio: "Yeah, this is bigger than what happened in 2008." "I'll distinguish it. In 2008, we had banks, it's the same thing..."
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"you had a certain amount of leverage, things go down, too much leverage means you're broke, in accounting terms. Then you look around and you say, who are the systemically important entities that you don't want to go broke? Because, do you want to those those banks at this time"
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"And then you can make up money, and make up credit, and you can keep them alive in some way, and you did it with banks, and through the banks, where were the mortgages, and that's what it looked like." "This is more complex than that, because you have the banks, and then..."
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"and then there are those, all of those beyond the banks, all the little businesses, and it's a bigger crisis and we have a less effective monetary policy because interest rates have reached their limit, and just buying financial assets by the central bank & buying the normal..."
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"...financial assets won't work. They have to buy the debt of the government. And the government, or *the many governments,* have to be effective in getting buying power and production to those who need it around the world"
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End of conversation
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