Ray Dalio, the founder and cochief investment officer of Bridgewater Associates, compares today's economic environment to that of the 1930s.
, the world's largest hedge fund, thinks that central banks' ability to reverse an economic downturn"is coming to an end."
Monetary Policy 2 doesn't work well because that doesn't produce adequate credit in the real economy , so there is"pushing on a string." That creates the need for… Put briefly, an already low interest rate environment, coupled with lackluster real credit growth and a gridlocked political environment, essentially ties the Fed's hands — an important lifeline in a time of crisis.
"Fiscal policy, which changes taxes and spending in politically motivated ways, can also be changed to be more stimulative or less stimulative in response to what is needed but that happens in lagging and highly inefficient ways," he added., it seems increasingly unlikely that the US government will continue to approve increased spending. And even if they do, it's unlikely that it will be executed in a timely, effective manner.
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