Latest learnings from Ray Dalio. Yahoo Finance, Mar 25, 2021
- There's a lot of liquidity available right now
- Bond holder or cash holder will pay if the cash injection does not increase productivity
- 2 types of inflation:
- Supply-Demand inflation - if demand is pressing to increase supply then prices rise
- Monetary inflation
- Value of money goes down
- Happens when people don't want to own Bonds - which is what we're seeing
- E.g., people don't want bonds so their value decreases so the rates rise that cause inflation
- New tech and ideas causes investors to extrapolate the past and increase those prices causing a bubble
- Current bubble is not what it was 2000 or 1929 but it is halfway there
- Rotation b/w value and growth stocks will keep happening
- We have been in 4 year bond bull market
- Rates will stay down only if Fed keeps a cap on rates; e.g. government outlawed gold in 1929 to keep money from flowing into it from bonds
- Bitcoin has proven itself in the last 10 years
- It's a possibility that the government will outlaw Bitcoin just the way gold was outlawed