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Ray Dalio, the founder of a successful hedge fund, has popularized the long term debt cycle which says that there we see short term debt cycles laid on top of a long term debt cycle which crashes every 50-100 years.
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The Economy Is Due For A Debt Crash – Long Term Debt Cycle & Credit Crisis
0:50 – Every 8 to 10 years we see an economic crash from the short term debt cycle and every 50 to 100 years we see a long term debt cycle crash
2:25 – The short term debt cycle lays on top of the long term debt cycle that most people don’t even know about
3:30 – How does credit work to create value out of thin air
4:17 – The more money you spend the more money someone else makes
5:52 – When people make more money they are more credit worthy which expands the economy
7:35 – What happens if the economy slows down and people spend less money
9:15 – What happens when you hit a peak on the long term debt cycle and the central bank can’t stimulate the economy
10:55 – What happens during a long term debt cycle crash and credit disappears during the deleveraging phase
11:50 – What happens when the economy enters a deleveraging phase in the economy
13:45 – When does the Fed start printing more money to fight deflation
14:45 – How to balance the printing of money with loss of credit
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Just hope you’re not close to retirement when the long term debt cycle crashes, even a conservative mix will suffer
That credit cycle does not work for all countries, Australia and Guines Bissau for instance.
Video quality on point ?
People are hoarding money now. Government is providing money in economy now.
Banks are hoarding money now.
Debt is reduced now.
Economy is better now ?
We like debt. It grows the economy. When things go bust, you get kicked out of your house and bankers resell the house. And bankers get bailed out and the process continues.
Best quote "It's human nature for people to want more." Yes!! Thank you. Our central planners believe in Demand side economics which basically says the opposite "Humans will only want more if you make them feel wealthy." So they are fighting the wrong battle.
Massive economic disaster;
Massive social disaster;
Global wreckage;
Unknown outcomes;
No playbook available.
Sell everything; buy food at Dollar Tree; hold on to your cash; fasten your seat belts and put on your helmet.
Pray, Dude, and re-analyze and edit the rule book.
The problems occurs when people have spent more on credit than they'll earn over their entire life in the hope that another sucker will buy their assets at over inflated prices.
My Frinend id like your vídeos thanks. Greetings FromMéxico City.
You need a War?
As I say to people who want to save money. Don't save… SPEND!
Except I guide them towards good, basic food and kitchen appliances.
I would buy $3 macaroni and cheese packets. Tonight I bought butter, milk, cheese, flour and pasta.
I made those same size servings for 50c!
I made three serves (froze them for later), I am putting the $7.50 towards extra equipment, food storage and buying more bulk food.
Spend like this enough times and it'll reward you. My food budget is $3-5 A DAY!
Hence I am now in a position with all my kitchen equipment paid for that I am saving on average $15 a day versus eating out! Invest in items around the house to save money.
Now throwing $200-300 a week into the bank. I don't spend a cent unless I have to. Even then I use coupons etc like crazy.
Good analysis. Thanks from bc canada
People are broke because they don't save.
I just don't understand how credit causes people to buy more things. It allows them to buy more things sooner, but they still earn the same amount of money so there is less to spend later. Even less overall, since they have to pay interest on the credit loans. How this is beneficial overall/long-term just makes no sense. It all evens out in time.
Is it true that a 750 credit score is worth more than 100k dollars cash?
? The education provided through this channel is unique to itself. I’ve been watching so many videos of finances, but these concepts are seem like the building blocks I need. It’s a little hard to grasp, I don’t know if I am the only one. I’m going to watch a couple more times. Thank you for the post!
the chart at 9:50 hasn't been updated for recent events.. the 10yr is just above 0.5%