Ray Dalio, founder of Bridgewater Associates, has a wonderful way of explaining credit’s role in an economy and the part credit cycles play in booms and busts.
He narrates a 30-minute video that I watched for the first time a few years ago and which is so good, I find myself coming back to it periodically (I also forced everyone in my family and most of my friends to watch it…).
In addition to this short, pithy video, Dalio has published a longer research piece which covers the same ground, but also looks at historical examples of debt cycles and deleveraging events. Even if (like me) your invitation to join the glitterati at the World Economic Forum in Davos got lost in the mail, watching this video and reading about how the Weimar Republic really botched things up back in the day should make you feel a few steps ahead regarding macro issues.
Highly recommended! Take a few minutes and look through this weekend.
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