Ray Dalio: markets are no longer free

by Chris Becker

Ray Dalio, the masterful manager at Bridgewater Associates had a long and wide ranging interview on Bloomberg over the weekend, nailing how the markets are no longer free allocaters of capital, but completely propped up and fed by the Fed and other central banks.

Take aside a half hour of your time to watch this, thankfully the interviewer doesn’t interrupt every 30 seconds like most.

Dalio basically says forget about P/Es and other valuation metrics when assessing stock value (calling a 40 P/E a sticker shock most investors have to get used to, with 15-20x no longer overvalued), get rid of cash, forget bonds and go stocks! Cough…and gold?

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    • Bear Bullwinkle

      But value is well underperforming growth, so I don’t think it’s just a simple effect of yields falling. There’s massive speculation going on.

    • Ray is talking about currency debasement which is different to the perpetually low yields that you are implying.

  1. Something about The Last Bear comes to mind… Oh, and Wave 5.
    (That young man who stood in front of the train the other day after looking at his RobinHood balance might be a sign of things to come?)

  2. Denis413MEMBER

    This is not new news. Dalio’s target audience appears to be on the low end of the spectrum in terms of financial literacy – I suspect he’s gearing up for a run at the presidency in 2024.

    Also, be warned – the last time Dalio said get out of cash the market tanked.

  3. Ukraine fnMEMBER

    So it’s all on red in the stock market casino.. no free market and the FED and all Central Banks world wide printing to the moon and lending at negative rates.. This is just the Aussie property ponzi on steroids across all fiscal markets in the world.
    Can’t be sustained..

  4. Point BreakMEMBER

    He articulates what many of us already know; The FED will do anything to keep the market afloat. The current social and political division would be amplified exponentially if the markets collapsed like 2008. We are approaching the end of the long term debt cycle and heading towards a paradigm shift. What the other side looks like is anyones guess. Gold is popular for a reason during times of turbulence.

    Investing in the States just isn’t appealing given we don’t know the rules of the game anymore. Social and political risks are impossible to predict in a country so divided. Trumpo is doing his best to fix that lol. At some point people will lose faith in the US and the USD. Maybe not for years but it will happen. The paradigm shift will most likely be expressed via a currency crisis at some point. China and Russia are stockpiling gold for a purpose. They know the endgame.

  5. – Central banking is straight out of the Communist Manifesto
    – This is now assering it’s muscle.

  6. BubbleyMEMBER

    RWNJ’s have found Mac Biz –

    “ WWG1WGA stands for Where We Go One, We Go All. That’s an adage or motto associated with a string of interconnected conspiracy theorists known collectively as Q, or QAnon. Just like the hacking collective known as Anonymous, anyone can claim to be part of QAnon or Q, and anyone can support the conspiracies proffered by the group. There is no official enrolment or membership process, so it would be near impossible to quantify how widespread the group is in any meaningful way.

    Qanon can be best described as a far-right conspiracy collective or movement. The core beliefs and theories of those who promote the QAnon brand is that there is a concerted and covert “deep state” effort across the globe to remove President Trump from the White House. Qanon proponents will frequently claim that those in the “deep state” are largely unknown shadowy figures, but can also include senior officials in the US Democratic party, the mainstream media and in many cases large parts of the US justice system and scientific communities.”

  7. Stewie GriffinMEMBER

    Nice fine – Good interview:

    “We are no longer in a market economy, but a political economy.”

      • Stewie GriffinMEMBER

        It was allowed to fail before – that isn’t the case anymore.

        IMHO it is probably more a cultural change, than a political change, but then in MultiCult that is much the same thing.

        • You need to make a specific case and attribute. Per se I can go decades back and point out numerous examples starting with regulatory, tax, environmental, equity antics, hiving off C-suite risk, PE funds, et al … Apple is a hedge fund out of Reno now for example.

          You seemed to miss the memo about so called free markets are for small – medium businesses and not networked wealth with political levers due to funding. Did you miss the GFC or something?

          Even so neoliberalism was just the vehicle to roll back all of FDR style government programs by the wealth set, back to an older paradigm.


          • Stewie GriffinMEMBER

            Nope. You’re just feeling the elephants trunk, neoliberalism is part of the same cultural beast.

          • Like I said you need to be more concise and attribute, say the above has no meaning and is completely unverifiable.

            Saying it is neither a form or reason or logical argument where Neoliberalism is a term with specific meaning and history.

  8. – I used to have a high regard for Ray Dalio but as time went by that regard started to shrink and shrink.
    – Dalio THINKS that the markets are supported by the FED but currently there a re still A LOT OF speculators who think the same way as Dalio.

  9. Aussie1929MEMBER

    Put 70% of my super into a 70%/30% spread of silver and gold respectively back in Dec 2018. Could see the writing on the wall thanks to not reading corporate media and it’s property shills. Snapped up more silver at this year’s bottom and laughing all the way from the bank Hahahahaaaaaaaa