Ray Dalio quote

Ray Dalio runs Bridgewater, which makes its money on the "big trends"/macro analysis.

investing fads he’s witnessed since he began trading as a 12-year-old golf caddie: the Nifty-50 stock craze of the 1970s, the 1980 gold bubble and even the 60- 40 stock-to-bond mix. “Manias occur when there is group thinking,” Dalio says.

These days, the view from Bridgewater is dour. He divides the world into two groups: developed debtor nations that are deleveraging and emerging creditor countries that are leveraging up. After years of overspending financed by borrowing, the former are being forced to lower their debt relative to their income levels, constraining spending levels and employment gains.
Developed debtor countries, including Greece, Spain and Italy, that can’t print money to make it easier to service their debts and to make up for slow credit growth will have decade- long depressions and debt defaults. “We worry about Europe not being able to solve its problems,” Dalio says.
Dalio expects emerging creditor nations to be tomorrow’s economic leaders. Countries such as China and India that have currencies and monetary policy linked to those in the U.S. are experiencing inflationary bubbles because their interest rates are too low, he says. They will have to unlink from the U.S. or face intolerable conditions. Emerging economies will account for 70 percent of global GDP in 15 to 20 years versus 47 percent now.
Dalio views the August market turbulence as consistent with Bridgewater’s expectations. “Emerging creditor countries are trading more like blue chips; the U.S. is trading more like a country in decline,” the Daily Observations read on Aug. 8.

See also video at
http://www.fundmymutualfund.com/2011/03/video-rare-tv-interview-with-manager-of.html