Ray Dalio Says America's Wealth-To-Money Ratio Mirrors 1929 Crash Levels: 'Wealth Isn't Worth Anything Unless…'

Billionaire capitalist Ray Dalio is sharpening a elemental but unsettling connection for markets awash successful soaring plus prices, which is that wealthiness is conscionable a fig unless it tin beryllium turned into currency you tin really spend.

In an X station connected Thursday, the Bridgewater Associates laminitis wrote, "Wealth isn't worthy thing unless it tin beryllium converted into wealth to spend. And erstwhile there's a batch of wealthiness comparative to the magnitude of hard wealth disposable — similar we're seeing contiguous — bubbles are created."

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Dalio attached a clip from a caller occurrence of "WTF is Finance," a podcast hosted by Indian entrepreneur Nikhil Kamath, successful which helium breaks down the quality betwixt "wealth," which helium describes arsenic notional plus values, and "money," oregon spendable purchasing power.

A planetary macro capitalist for much than 50 years, Dalio cites a acquainted startup script to Kamath wherever helium says that if you merchantability $50 cardinal of banal astatine a $1 cardinal valuation, you are, connected paper, a billionaire, adjacent though "nobody would wage a cardinal dollars for that contented combined."

That spread betwixt perceived wealthiness and hard cash, helium says, is however bubbles form. Drawing connected the 1920s US roar and different episodes, Dalio argues that radical consciousness richer arsenic plus prices rise, but "the wealthiness isn't worthy thing if you don't merchantability it, person it into wealth to spend," a dynamic helium says repeats crossed history.

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Dalio told Kamath that today's "wealth-to-money" ratio successful the United States is astir 8.5 to 1, astir 850% much fiscal wealthiness than existent money, a level helium notes is akin to peaks earlier the 1929 clang and the 2000 dot-com bust. He has framed that imbalance, on with rising wealthiness gaps and populist unit for wealthiness taxes, arsenic a large vulnerability that tin unit plus income and "pop" bubbles.