imagesWhat has Ray Dalio absolutely TERRIFIED??

 

 

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Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics

When I saw this comment from Ray Dalio I said to myself, “this isn’t someone trying to be a prognosticator or compassionate person, this is someone that has had an epiphany that his huge success probably had more to do with his rolodex and endless supply of free money more than anything else and is becoming depressed over that realization.”  His All Asset fund was down 7% in 2015 and negative 2 of the past 3 years.  –  A colleague who manages money in an email to IRD today

Ray Dalio has achieved “rock star” status in the hedge fund world.  Per a report sourced by Zerohedge, Dalio appears to be frightened by the prospects of the “normalization” of Central Bank monetary policy.  In fact, he penned an op-ed in the Financial Times in which he states:  “Since the dollar is the world’s most important currency, the Fed is the most important central bank for the world as well as the central bank for Americans, and as the risks are asymmetric on the downside, it is best for the world and for the US for the Fed not to tighten.”

What has Ray frightened?  There are several highly problematic assertions embedded in that comment by Dalio.  First and foremost is the idea that the dollar is the world’s most important currency.  I wonder how China might respond to that comment?  China has been methodically getting rid of its use of the dollar.  In fact, it can be argued that the world’s most important currency is gold, which is why China and Russia have been accumulating gold on a daily basis with both hands.  I find it interesting that Dalio can discuss currencies and monetary policy and not utter one word about gold.

Dalio has been making the argument that economic vitality is dependent on asset levels. This idea is endemic to the hubris behind Wall Street’s financialization of the monetary system.  The truth is the only outcome accomplished by a system based on fiat currency, fractional banking and the financialization of assets is the monarchical enrichment of money skimmers like Dalio and his Wall Street bank cohorts. If the Fed were to begin raising interest rates in earnest, it would remove Dalio’s ability to skim the system.

As I discussed in a blog post last week – LINK – contrary to Dalio’s assertion, financial assets do not create real economic growth.  If anything, the proliferation of financial assets creates nothing more than Wall Street-enriching bubbles which culminate with a systemic collapse that destroys everything.   To correlate the trading level of financial assets with the creation and support of economic growth is either an intentional misrepresentation of the truth for the purpose of self-interested preservation or naive ignorance.  My inclination is to dismiss the latter as beyond probable.

A collapsing global financial system will take away Wall Street’s continued enrichment from QE and ZIRP.   This is what has Dalio frightened and this is why he is urging the Fed to refrain from raising interest rates.  Perhaps he’s also making an appeal for more QE.   What better way to re-inflate monetary assets than for the Fed to print more money?

Unfortunately QE will eventually lose its effectiveness as an asset inflator.  The old law of diminishing returns.  I have no doubt Mr. Dalio is familiar with that law of economics.  But he’s lost sight of this reality because he’d been blinded by wealth-induced hubris.  At some point that proverbial can being kicked by the Fed and the U.S. Government will no longer move.   That’s when the real fun begins and that’s when people will wonder why Dalio never discussed gold.

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  1. Ray Dalio is not terrified.  To say he is is a blatant falsehood.  What he is is one of the most highly regarded money managers in the world.  Kranzler on the other hand is an absolute nobody. I am highly suspicious he even manages other peoples money given how mind numbingly bad his advice has been over the last 3-4 years.

    • vegas, why do you come here on a what appears to be a daily basis, yet you are completely disgusted and frustrated with anyone who says anything positive towards PMs?

      is it because you have some kind of personality disorder and constantly seek to make yourself miserable or maybe enjoy deriding others, or is it because it is your job to post stuff which may attempt to discredit metals analysts and dissuade others from buying PMs?

    • [………………………………….] conversation on this website has absolutely NO effect on the price of silver or gold. To think that there are “operatives” here trying to juke people out of the PM holdings is a low IQ fantasy.

      The price of PM’s will move when money invested elsewhere rotates into the sector and not before. I am hopeful this shift is now taking place.  Until then I am going to point out the lameness of articles that clain Ray Dalio is “terrified” or that the last snowstorm was a judgement by God against Roe V Wade. Its just freaking pure stupidity and the paranoid and grossly uneducated [……] is just going to have to put up with it.

    • @Vegasidler I know this sounds boastful, but my [^^^^] is probably ten to fifteen times bigger than yours…..
      Well… Being as your a turtle, and im a shepherd; but Im just speaking as directly and honestly as I can.

      Seems like someones trying to make of for a “shortfall” somewhere else? I bet you drive a Corvette too, dont you? ????

    • “I am sick and tired of the fraud and hyperbole that takes place in this sector.”

      i put it to you that you are the fraud. here’s why…

      1) NOBODY (in their right mind) would declare, even “anonymously” (which is never really anonymous), their gold holdings, especially if it is such a huge hoarding as you claim. 10-15 times might be understated because i am a poor unemployed slob who has no gold and bought his first few silver coins just months ago. so congrats to you.

      2) why then do you own sooooo much gold? what purpose does it serve if all these analysts are wrong and blatant liars and the price will go down, down, down forever? regardless of the “marketing” component of some of these PM analysts, they clearly are correct in some way because even you feel that you need to own so much. so you claim…

      3) why do you need to come here daily and bash PM analysts, ESPECIALLY some of the more credible ones? there is clearly a hidden agenda behind your visits for you to post constant negative comments.

      your story doesn’t add up.

    • Wow you really are a [……………]

      [……………………………………………]
      So you love to deride others you say. How funny is that when you only make yourself look like the idiot. Yep, you definately have exposed yourself. It’s [people] like you that THINK you know so much but really are stupid. It’s the guys who KNOW that there is so much that they DON’T KNOW who are truly intelligent.

      Think about it. You blast these guys for promoting something that you yourself claim to own and brag about how much of it you have, then call them stupid for promoting it. Really?  It’s funny to see the stupidity you display mixed with the pompous attitude.

      This is you literally –  ” Man I own so many sports cars but the guys that drive those cars, crap, they are total morans and don’t even know it. Thank god I”m a turtle, you know. Turtles are so gay.”

  2. @vegasidler

    Hmmmm…

    I am just trying to put together a small stack little by little…I am well behind the curve…for example I was excited to add Qty 1 Mexican 20 Peso over the weekend…better late than never I suppose…

    You certainly have more experience and knowledge than me… but at first glance I would question the nationalization issue if the SHTF…

    i.e. Government Motors, ObamaCare

    Does this type of behavior from our gov concern you when investing in “Gold in the ground”?

    If the SHTF, the dollar goes bust and the vaults are truly depleted then what happens?

    Is this a legitimate concern? I have never studied the matter.

    I get the “risk vs reward” part of it though…hard to quantify the risk though…or is it?

     

    • If a country like Ghana nationalizes its mines it will be a total loss to any company that had an operation there. If the US or Canada nationalizes I assume there will be some kind of compensation offered.  I would also assume that it would not be entirely fair and no private investor involved will be happy.

      Unless it is a total disaster I doubt they will do this.  I do however think they will consider a windfall profits tax on gold. I am hoping for a goldilocks environment where its bad enough to drive the price of gold to say 3000 an ounce but not bad enough for more extreme measures. We are all going to find out probably within the next 3 or 4 years.

      I do not think the dollar will bust.  I do think it will lose half its purchasing power and americans will live far less grandly than they have come to expect. There will probably be all kinds of social unrest.

      Some people wont touch miners. Quite frankly it is a lousy business. Its a leveraged play on the price of gold that appeals to the gambler in me.

      I honestly think we are coming to the end of our current system. There are going to be fireworks.

       

       

    • It will be a cold day in hell before US gold eagles get “taxed” as they are official currency…so take the “Ghana gold mine expert advice” with a huge grain of salt.

    • farang…Several states have passed or have pending legislation to treat U.S. gold and silver coins as spendable money.  Currently there are no tax reporting requirements on the sale of U.S. mint gold and silver coins, whereas the sale of generic bullion products triggers tax reporting.  That in itself is most interesting and only makes sense if the long term plan has been to make U.S. gold and silver coins spendable money again.

    • I do not think the dollar will bust.  I do think it will lose half its purchasing power and americans will live far less grandly than they have come to expect. There will probably be all kinds of social unrest.

      Since I started driving a car, the US dollar has lost about 90% of its purchasing power, based on the gasoline standard. People sometimes argue that you cannot eat gold or silver, which is true, but not meaningful to me. But using the gasoline standard hits home directly.

      I could use the hot-dog standard, or many others, with similar results.

  3. I can see it now:

    The U.S. markets- decimated! Everyone lost everything, people starving in the streets, and businesses going under, closing down… Wait! Someone, somewhere managed to gather some gold and silver!!??

    WINDFALL TAX!

    So, aside from managing the collapse of society, how is it that (in this scenario) the new pm backed world, riddled by US peasants who own no gold, the last bastion of people are going to

    1. Come out and sell all of their pms, realizing this masive wealth.

    2. Allow any government to allocate their hidden stash in the first place.

    3. Not sell in small quantities in order not to raise an alarm?

    4. Not lobby against this tax application, as this is wealth preservation, not wealth gained.

    Lastly, its not us working folk who will hold any tangible levels of pms, but the insiders, and since the insiders own the politicians, its likely they will not be taxed, nor you, of your pittance of gold.

     

    • 4. Not lobby against this tax application, as this is wealth preservation, not wealth gained.

      The tax collector does not collect taxes based on wealth (except for US property taxes), but by gross amount gained. So if I bought gold at $350/ounce long ago, and sell for $3500/ounce some time in the future, my wealth will not have increased at all, but my gross income will have increases to 10x what I paid, and you can be sure they will tax me on that amount, even without an excess profits tax.

    • @shamus001   The idea that the US government or any government can create some sort of effective tax structure that taxes either income, capital gains, windfall or consumption tax on precious metals would fail instantly   We are a pretty  peaceful people, given to tolerating many small insults from the GREAT AMERICA,  to paraphrase another person on the boards.

      Even during the last days of the Roman empire, when a tax collection stood by every business and retail seller stalls in the marketplace, one tax goon for every business owner, collecting the taxes with the threat of death to those who did not pay, the empire was not able to collect enough to pay the bills.  The empire fell shortly afterward.

      I am firmly in the camp that should push come to shove, there are a dozen ways to work under, through and around the tax code related to PMs that are presently on the books.  Any future ruling will instantly create barter, private sales and many other means to avoid disclosing any transactions.

      The irony is that the AGE is a $50 coin, technically legal tender, that’s also reported under the IRS rules as a  an item worth $50.  If you sold it as a percentage greater than $50, you’d owe the proportionately higher gain using a $50 basis.  And that would only occur if you chose to report any transaction.  The idea that the government, IRS, state and local tax authorities could track our actions is totally beyond their capacities.   I prefer to treat PMs with the same mantra as dealing with undesireables.  Shoot, Shovel and shut up.

      These gummint drones can’t find their butts with both hands, any number of terrorist cells or Hillary’s emails when they are on a server.  I no longer worry about the long hand of Uncle Sam reaching in my wallet

      Maybe Samuel L Jackson, but he’s pretty bad ass, for an actor.

       

  4. The real economic factors that will ultimately override the blatant manipulation of the global economy are factors like demographics. When junior is 29, living in your basement and saddled with student debt, his generation is unlikely to be the consumers buying the homes the babyboomers will be counting on to sell to finance their retirement. I’m a middle boomer and still not of retirement age for two more years. See my point? However. In a few decades we die off and leave what assets we can to our kids…if times are good…which they are not for the great majority. Invest in things with intrinsic value at reasonable levels. Oil futures 2 years out @ $50 seems a good bet. A wager. Remember that. Gold and silver? Seems cheap to me now, and if I see more intentional and blatant Fraud conducted with official approval of the criminal US Government in the markets or they light the war fuse in N.E. Syria with Russia as they seem hellbent to do, then I add another $10,000 chunk of gold and silver currency to my stack. Korb khun korp! Pob gun mai! (see you later!)

  5. My apologies to Him. I just detest rude behavior, especially from blowhard keyboard investment geniuses. No one “knows” the future…although many nefarious folks do attempt to create “illusion” to “frame The Narrative” and oddly enough I was just hacked and disconnected after my last comment, had to return to website. I read a comment the other day here I found disturbing: one new commenter was accusing the other of ” having issues with government authority” for stating his “opposition” to the obvious criminal behaviour of said government. It is a perverted and well-documented Communist tactic to brand opponents as “radical” and as a believer that being a “Liberal” means defending our Constitutional Liberties from this criminal government, I am sickened to see the level of rot in my nation. Infested.

    • @farang

      Your response reminds me of those Supertramp lyrics on Breakfast in America:

      There are times when all the world’s asleep,
      The questions run too deep
      For such a simple man.
      Won’t you please, please tell me what we’ve learned
      I know it sounds absurd
      But please tell me who I am.

      Now watch what you say or they’ll be calling you a radical,
      Liberal, fanatical, criminal.
      Won’t you sign up your name, we’d like to feel you’re
      Acceptable, respectable, presentable, a vegetable!

  6. Ugly Dog…Thanks. I was specifically mentioning USGold Eagles as they already are official currency. Regardless of what states may enact. In other words: I used that fact to carry my type of currency on trips abroad. How much is face value of a US 1oz. Gold Eagle? What is the limit for carrying currency through airports? 🙂 Did you know in Germany that you can stroll into a DB branch, pick out what silver or gold coin…currency of the world, and they will call you when it arrives and then you pay the price it was the day you ordered? No one looked twice at them at Frankfurt airport back to Shangra- La. I hear the US TSA goons and the DEA are conspiratorial highwaymen now, shaking down innocent tourists of their cash. Beware of those “Heroes” America…oh, and be sure to give them your guns!

    • farang…You understand this, but others may not.  If/when U.S.mint gold and silver coins are declared spendable money again, then the “profit” will not be taxable when you sell in exchange for the legal tender(currency).

  7. Yes as BrotherJohnF and others remind us, we are to pay our taxes.  Yet Christians as members of the royal priesthood reigning with Christ in the kingdom of Heaven have the duty to help us appoint men over us who collect such fairly (I Cor. 6:2, 3; I Cor. 13:1).  Ted  Cruz shows great wisdom and courage in the battle against good and evil by supporting the flat tax. The sole remaining remaining unchained contestants on the side of evil in the battle against good and evil are Socialists who disturb the scales of justice and free trade. Being unfair and utilizing unbalanced scales is literally the vision of evil given to us by God in the book of Revelation. Such socialists are described as one of the four horsemen riding a black horse and bringing death to those that oppose them (the flat tax will be the reason Cruz loses – if he loses.  and BTW such courageous acts have caused other presidents to be murdered!). Surely our nation will not survive should we allow our politicians to redefine what a “lie” is (the bible teaches that we can deceive those who do not deserve to know everything about us) just to support their continued abuses against their fellow Americans. Please consider Revelation 4-8 in the 2016 Analytical Study Bible   https://www.youtube.com/watch?v=OhivrBOK6SE

  8. On these alternative new sites, there always seems to be 1 dissenter. Appointed to each site like an employer would assign employees to perform a specific task. They are obvious and stick out like sore wankers. They are so obviously shills, trolls…whatever you want to call these POS.

    The best thing one can do is never…ever reply to them because they are unclean liars working for the establishment. The less of a response they get, the less value they are to their employer…they get axed or in trouble for being the failures they really are.

    So please…DON’T FEED THE TROLLS! IGNORE THEM!

  9. @Pablokoh   Cruz is owned by Blankfein

    Cruz’s tramp stamp is printed under his tidy whiteys;  “Owned by Goldman Sachs’.   Cruz’s wife has his soul in cold storage.

    It’s a very small box, around the size of an ice cube.  The storage box, not his soul

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