It's no secret that Bridgewater founder Ray Dalio spends far more time these days making media appearances and publishing lengthy LinkedIn posts expounding upon his various opinions about the flaws of American capitalism, the Great Power struggle between the US and China, and his rationale for remaining invested in China - than he does managing assets at Bridgewater. The world's largest hedge fund mostly leaves that to the computers now.
But in his latest headline-grabbing sitdown with CNBC's Andrew Ross Sorkin, Dalio once again offered a defense of remaining invested in China (among other ex-US markets) while proclaiming that regulators from around the world will ultimately conspire to "kill" bitcoin.
"Well I think regulation, I think at the end of the day if it's really successful, they'll kill it. And they'll try to kill it and I think they will kill it because they have ways of killing it but that doesn't mean it doesn't have, you know, a place, a value and so on," Dalio said.
However, that doesn't mean investors should ignore crypto. After Dalio again confirming that he owns bitcoin, Dalio said investors should have some exposure to crypto since it's better than cash. Dalio said his exposure to crypto is smaller than his exposure to gold.
"I think it’s worth considering all the alternatives to cash and all the alternatives to the other financial assets. Bitcoin is a possibility. I have a certain amount of money in bitcoin," Dalio said. "It’s an amazing accomplishment to have brought it from where that programming occurred to where it is through the test of time."
China has already cracked down on crypto mining and crypto usage, and India is preparing to ban all crypto mining and trading later this year. But the notion that governments will conspire to "kill" bitcoin is still very much a minority view - and Dalio's comment drew mocking responses on twitter.
Ray Dalio: Governments will kill Bitcoin.— Blockworks (@Blockworks_) September 15, 2021
China: We tried and we failed.
India: We tried and we failed.
US: We are trying and we will likely fail.
Moving on from bitcoin, Dalio was asked about another popular topic in contemporary markets: China. Does Dalio still believe China will soon outpace the US and take the mantle of world super power? Why yes, he does. And so should anybody else who has seen the "lines on charts" that Dalio has seen.
SORKIN: Let's talk about China because you have a view that that China will eventually I think overtake the great American empire, no?
DALIO: Well, I mean if you just take lines on charts and you get basically see what's going on in terms of basic fundamentals, they were four times more than four times as many Chinese and so if they had an average per capita income that was half the average American, they will be twice as large as the United States. And if you take their growth rate and so on, it is likely that China, and today, China is comparable in many ways. They have a larger percentage of world trade, they're comparable in GDP production depending on whether you're doing it PPP adjusted or not, and so on. So, it is a reality today that they're roughly comparable and that they are increasing, get their strength at a faster rate than we are, that's a reality.
SORKIN: Given though the regulatory crackdown in China right now, there are a lot of people say you know what, you shouldn't be investing in China. You have a different view.
DALIO: Yeah. First of all, I think people have not, a lot of people have not spent a lot of time there. I've been going there since 1984 and I've been very lucky to know many people from the most common people to the most senior leadership and so on, so forth. And I think you have to understand what's going on and I'll just try to say it in a nutshell, okay. Everybody follows the approach that they believe is best for their own country. I can't tell you whether their approach, our approach, my job isn't to do that but they have a top down approach rather than a bottom up approach, very much like a strict parent so the question, the riddle that you have to have then asked yourself, answered before, is how does a Communist Party that talks about Marxism-Leninism and at the same time has such, the second largest capital markets and the development of capital markets coexist and the answer to that is that they believe that capitalism is a way of increasing the wealth and power of the country that's been key, key at the same time as the, there's an important to redistribute. If you look at the policies of that are being dealt with now and I can rattle off the four elements of those policies, they're not going to disrupt they're not going back to what you would call the old communism that your, your, they're very practical people. And so, the issue is really the issue is more control like they will tell your kids how many video games they can watch where you wouldn't. It's like a strict parent and they're and they will redistribute the wealth but if you take the measurements of capitalism right now and I can continue I have a lot of measures I won't get into but capitalism, the United States and China are the most capitalist countries, right, and if you were to say, will they go as far to the left as Europe has gone. It's unlikely that they will go as far to the left as Europe has gone on those measures whether those are tax, redistribution, the effect of capital markets and the like and you can't get in and out of a place on basis of that. In addition, you need diversification.
After letting Dalio, a billionaire, blather on and on about what it would take to fix wealth inequality, CNBC wrapped up its interview with Dalio...
...before bringing on Hayman Capital founder Kyle Bass, a vocal critic of China and the Fed's easy money policies.
Like Steve Bannon before him, Bass basically accused Dalio and other Wall Street heavyweights like BlackRock of helping to legitimize China's communist regime. After blaming the Fed and its other central banks for driving wealth equality with their money printing policies and their bailouts.
"Capitalism without bankruptcy is like Christianity without hell," Bass said, as he blasted the central banks and their system of easy money that's keeping countless "zombie companies" alive.
Bass also blasted the SEC's implementation of the Holding Foreign Companies Accountable Act, and the three year grace period it's allowing the hundreds of Chinese companies listed on US exchanges.
"It's an open season on US investors for the next three years...it's open season on US investors. What I'd love to talk about Joe is the largest policy gap in US history is we have the Commerce Department, the Treasury and the Pentagon all on different pages," Bass said.
Later, Bass turned his attention to Dalio, and a host of institutional investors, accusing them of turning a blind eye to China's human rights abuses while supporting Chinese companies with their investment dollars.
"I wonder what he thought about Tiananmen Square?" Bass mused on remarks from Dalio about how many years he had spent doing business in China.
And as the interview drew to a close, Bass went further, jabbing that "maybe Ray should move to China" as the anchor reminded him of Dalio's remarks positively comparing China to US.
Later, when it came time to release the clips from the interview, CNBC's producers left Bass's rant out.