The Head Of The World's Biggest Hedge Fund Sees "Economic Collapse" Due To Money Printing By Early 2013

Tyler Durden's picture

As part of its most recent issue the New Yorker has released a must read interview with Ray Dalio - head of the world's biggest hedge fund, Bridgewater. Dalio's fund, which according to some may now be as large as $80 billion, continues to outperform even in this problematic environment, indicating that unlike various other managers who shall remain nameless, and whose wealth is built up almost exclusively on one trade (and that belonging to someone else in the first place), Dalio, despite rumors that he is preparing to leave his current position and is actively seeking a replacement, is still keenly able to adapt to changing macro conditions. Which is why his warning about future rounds of QE, which he sees as a certainty, should be heeded. Especially since it conforms 100% with the warnings of Zero Hedge - Dalio believes that future inevitable money printing will "lead to a collapse in currencies and bond markets." Dalio is even kind enough to give a time frame. "I think late 2012 or
early 2013 is going to be another very difficult period.
" He is, to say the least, quite diplomatic.

From the full interview:

Dalio believes that some heavily indebted countries, including the
United States, will eventually opt for printing money as a way to deal
with their debts, which will lead to a collapse in their currency and in
their bond markets
. “There hasn’t been a case in history where they
haven’t eventually printed money and devalued their currency
,” he said.
Other developed countries, particularly those tied to the euro and thus
to the European Central Bank, don’t have the option of printing money
and are destined to undergo “classic depressions,” Dalio said. The
recent deal to avoid an immediate debt default by Greece didn’t alter
his pessimistic view. “People concentrate on the particular thing of the
moment, and they forget the larger underlying forces,” he said. “That’s
what got us into the debt crisis. It’s just today, today

assessment sounded alarmingly plausible. But when one plays the global
financial markets a thorough economic analysis is only the first stage
of the game. At least as important is getting the timing right. I asked
Dalio when all this would start to come together. “I think late 2012 or
early 2013 is going to be another very difficult period,” he said.

Translation: enjoy your -0.002% Bills and paying uncle Sam to hold your money while you can.

h/t A B

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carbonmutant's picture

Optimistic at best...

Pladizow's picture

What are Bridgewaters postions, i.e., Gold Silver etc......?

Highrev's picture

Is this starting to get top billing on the nightly news over there in the States?

It is over here in Europe.

That's usually a strong indication that a short term bottom is not far off.

trav7777's picture

I'll take Pladizow's avatar as my "short term bottom"

Cash_is_Trash's picture

Such supple breasts...

If only default had such a nice landing.

Hard assets on boobies, boobiez

Zeilschip's picture

This is an easy call that will never be verified as it takes place after the Maya 2012 apocalypse. I'm serious.

Lets_Eat_Ben's picture

I'm curious, how do you live your day-to-day life if you seriously think late 2012 is the end of man/world/universe?


tip e. canoe's picture

the Mayans never said it was the end of the world, just an end of a 5,000+ year old cycle.

FlyPaper's picture

Had to laugh.  Author suggests that you can buy gold, but it has risks... each supposed risk for gold was pretty much the same for Treasuries:

a)  Gold - "No intrinsic value" ( vs. Treasuries backed by an insolvent govt)

b)  Gold - Doesn't pay dividends (wow! Treasury yields .01%)

c)  Gold - Is at an all-time high (... so are bonds. Duh)

d)  Gold - Doesn't offset inflation very well (? and bonds do?)

Wisdom from the wall-street crowd....


FeralSerf's picture

Isn't the (allegedly predicted) Maya 2012 apocalypse late 2012 also?

Liquid Courage's picture

Take a closer look. That bottom's actually a top. Stealth aereoli.

I think I need to buy a gun's picture

i don't believe any of these guys....

the crisis is now and coming within 1-2 weeks.....i think obama revalues gold all at once.

buffett that jerkoff just said we need something big well we are going to have something big.

enough of the bs how much is physical gold worth in the us and then lets move forward with rebuilding the country...

i-dog's picture

"the crisis is now and coming within 1-2 weeks"

No way. They've got lots of options to kick the can...and they will kick it...stabbing repeatedly at the 'print' button being the most obvious. This guy's estimate of end-2012 seems spot-on to me. It also happens to coincide with TPTB's timetable for a collapse into a police state. So, relax and warm another bowl of popcorn.

"lets move forward with rebuilding the country"

Riiiiiight. All you have to do is convince 320 million shopping and teevee addicts to get rid of the Federal Government (and all of its handouts) in its entirety and we can get cracking on it! However, be advised that 535 congress critters will, of course, be resisting this effort and running multi-million dollar teevee campaigns, generously financed by the TBTFs, aimed at those 320 million shoppers to convince them that everything is under control and that there is absolutely nothing to worry about. [Transitory] Shared Sacrifice...Hope and Change...Bright Tomorrow [after the Soft Patch]...For The Children...Gawd Bless Merkah!

So, do you have a Plan B?

Milestones's picture

Damn rebel cynic!      Milestones

Michael's picture

I never make a hard date call on economic collapse events, but since this upcoming one is the big one, I'll go out on a limb for the big event.

October 10, 2011 Columbus Day will be a major bond and stock market crash and burn date of biblical proportions.

There will be a few major dislocations before that date which may seem to be the big on, but it's not. October 10, 2011 is the big crash day.

IQ 145's picture

 I think the bullshit will go on and on for years. When Gold gets to around $5,000/oz. people will be seriously nervous in the service; right now the majority still have belief system intact from the previous reality.

DoChenRollingBearing's picture

I'm with the smart guy on this one.  Probably yerars and years.

Perhaps gold makes its move to $55,000 once it has reached $5000.  FOFOA sez it could happen at moment, now, or in a few years.

Michael's picture

I just thank God the debt ceiling will be raised to infinity and QE3 will start right on cue.

I need the biggest bang of an economic bust there can possibly be. My doctor prescribed it for me and my life will not be complete without it. 

Michael's picture

Wall Street has become evil, pure evil.

It wasn't always that way.

In the past it took its lumps like in so many times past.

But now it has figured out a way where it doesn't have to take any lumps it don't like.

A populist uprising could arrive between Main Street and Wall Street. 

cosmictrainwreck's picture

yeah... as a poster way down below says "it's the slowest plane crash I've ever seen/been on" Also reminds me of observer remarking few years ago "I'd predicted the end, but I grossly understimated the magnitude of perverse creativity of TPTB" (words to that effect)

Bananamerican's picture's the ONLY thing you can say in Bernanke's defense...instead of a needle dive into the ground we get a "controlled" crash into terrain....."bankers and women 1st"....

Pinktip's picture

I'll go OT tinfoil with the Mayan calendar as Oct 28 2011 not 12/21/12

Look it up or youtube "In Search of" with Lenard Neimoy (sp) Mayan

from the late 70's.

And for what it's worth, the Porter Stansbury adds that have run for

+8months straight on the economic collapse.......

Hooter Shaker's picture

I listened to his ad.  He almost had me.....then he asked me for money.

wisefool's picture

If G.E. /FoxNews/Warren Buffet/_______ Do not pay taxes commensurate with the complexity required to vet their tax bill. Then where does the money come from to pay the IRS agent who inspects their tax bill?

-- Aristotle.


Tim Geithner is the only man for the job.

-- Obama. 2009.

Roger Knights's picture

A few days ago S&P threatened to lower Treasuries' rating by a notch within three months if no long-term fix to US debt is agreed to by both parties. That's unlikely, so an S&P downgrade, if it happens, would occur around Oct. 10.

i-dog's picture

Hehehe ... creative and adaptive individualists always have a Plan B ... collectivists, not so much -- they're just transfixed in the headlights waiting to follow their next 'leader' (known as a 'decoy' to the rest of us)!

Incubus's picture

No way. They've got lots of options to kick the can...and they will kick it...

They'll have Chuck Norris roundhouse kick the can before they let stuff collapse before it's been thoroughly looted.

oh, yeah... I just went there.

Hard Assets's picture

Tell me what you think of this idea.....time to 'cut' a global deal.

Pick a date, say Aug 1., 2011.  (just less than 2 weeks).

Every county gets to issue itself $1T in its own currency. ($5T? $10T?)

So the US gives itself, $1T, the ECB gives itself $800B (or whatever the exchange rate is at that moment), Japan $1T in Yen and so on and so forth with every country.

Three conditions:

  1. All issued money must immediately pay down sovereign debt.
  2. The top level government of the country, must legislate new internationally agreed, banking reform as per a "globally accepted template".
  3. The banking system within each country will be informed of the changes. The banks will serve the public, the government will serve the public. The days of bankers serving the elite is over. Any banker found of misconduct will be jailed.

Personal note:

Bernanke's personal mission is that there "will be no deflation on my watch". Expect global QE3 and prepare. Fix interest rates on debt at a minimum. For the adventurous, acquire fixed debt and invest in an inflation instrument.

I have 50% net worth cash, 50% net worth gold and silver bullion. Here's a funny one, does this make sense? Suppose I have $500,000 cash and $500,000 bullion. If one doubles and one halves, don't I have $1,250,000?

Blow it up, either way.

Bring it on !



Al Gorerhythm's picture

Ahhhh......., the Nominal Amount deception still clings to wealth perceptions. 


Diogenes's picture

Lets see..... Im overdrawn on my bank account so I will just write a check on my account and deposit it in my account. That will cure the overdraft.

Then, I will promise not to overdraw my account again. Seriously, this is the last time. Unless its like, you know, an emergency. Or I need to buy something real bad.

Dont see why that wouldnt work.

dougngen's picture

I have 50% net worth cash, 50% net worth gold and silver bullion. Here's a funny one, does this make sense? Suppose I have $500,000 cash and $500,000 bullion. If one doubles and one halves, don't I have $1,250,000?

That is a Brilliant theory.... how will your CASH double in value again?

Praetorian Guard's picture

Neither will do you jack shit when the collapse comes. Enjoy it now and remember the good 'ole days...

ToNYC's picture


Shhh! He's on a roll with one-way math. You make it up on volume by doubling down.

global's picture

he's holding Swiss Francs

francis_sawyer's picture

"enough of the bs how much is physical gold worth in the us and then lets move forward with rebuilding the country"


"There's more money to be made in destroying a country than building one"

- Rhett Butler

CalibratedConfidence's picture

No play here.  The States need a Kardashian or something that isn't difficult to think about in  order for the nighty news to play it.

CalibratedConfidence's picture

No play here.  The States need a Kardashian or something that isn't difficult to think about in  order for the nighty news to play it.

IQ 145's picture

 This isn't "usually". The human desire to trivialize the study of major markets by constantly opting for one simple story or the other simple story from whatever possible cherry-picked list of theirs that makes up their fiction of "the past" is one of its worst features. Neither the short term nor the long term bottom is on the horizon.

I think I need to buy a gun's picture

we don;t care what these people have to say....

this is coming and coming quick now all at once......


Buffett that jerkoff just said we need something big well its coming buy end of summer.....

let revalue the gold already then move on

Praetorian Guard's picture

Hello? McFly? Anyone home? He mentioned the word COLLAPSE and your asking about gold and silver? PM's will NOT do you any good when it collapses. JiT shuts down, nothing is made, nothing is imported, except very few items, and people are in chaos or in subsistence mode... "money" is not always "gold and silver"...

FeralSerf's picture

I heard somewhere that the Anunnaki are coming back real soon now and they value gold above all else.  If you ain't got the gold, you'll be in deep shit.  Kinda like when Pizzaro locked up the Inca, I think.

I have some doubts, but a few K-Rands just in case can't hurt.  It's like going to church, (except I haven't gone that far off the deep end).

AldousHuxley's picture

I'd say net short. Even metals  go south when there is a crisis.

centerline's picture

Doesn't want to create a panic.  And doesn't want to get run over when heading for the exits.  If he says late 2012, subtract 6 months or so as a target.

PaperBugsBurn's picture

I think this fall but with Isntreal warmongering we'll just have to see.