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👀 Ray Dalio: 3 places to look right now

👀 Ray Dalio: 3 places to look right now

PLUS: is crypto about to rebound?

Alex M.
September 18, 2023

GM everyone. This is 2036, the crypto newsletter that pays you.

Here’s what we’re serving up today 🍲: Ray Dalio is one of the world’s most legendary investors. Last week, he talked about his latest predictions and what he’s keeping on his radar.

Let’s dig in.

🥔 Today’s meat and potatoes

Get smarter on crypto in 2 minutes

Ray Dalio is:

the founder of the world’s largest hedge fund (Bridgewater Associates ∼$123 billion AUM)
one of the most respected investors worldwide
the author of Principles, The Changing World Order and some of the most educational YouTube videos of all time
worth ∼$15.4 billion

i.e. when Ray speaks, the investing world listens very carefully.

Ray correctly predicted the ‘08 financial crisis and now spends most of his time teaching others how to navigate life & markets.

This weekend, he was interviewed by fellow billionaires on the state of the world, where he sees things going, and the conflict between the US and China.

Here’s what he had to say:

Spot Ray

1/ There are 3 places in the world where things are happening right now:

the ASEAN countries (Singapore, Indonesia, Philippines, Vietnam, etc.)
the Gulf countries (UAE, Saudi Arabia, Qatar, etc.)
India

India is unique in that it has:

the biggest population in the world (1.4 billion people)
the fastest-growing economy in the world (10.5% annual growth)
Prime Minister Modi

Ray Dalio said India is like China in the 80s.

Narendra Modi - India’s prime minister - is like Deng Xiaoping, who opened up China to the world and kicked off the largest growth story in human history.

On top of that, India is neutral between China and the US.

Historically, neutral countries do best (e.g. Japan during the US/Soviet conflict).

[Balaji Srinivasan - the intellectual godfather of 2036 - has a great presentation on India vs. China/US]

2/ The next 5 years will be marked by radical disorder.

First, the US will hold presidential elections. The gap between the rich and the poor is widening, and the election could get messy.

Next, the conflict between the US and China will intensify - over resources and cultural values.

Then, we’ll have to come to terms with the cost of climate change.

Finally, new technologies will create both miracles and powerful weapons.

But that pales in comparison to the biggest problem we’ll have to deal with:

3/ Debt.

Throughout history, no superpower has been able to indefinitely increase its living standards while spending more than it produces.

Debt payments are already skyrocketing due to higher interest rates:

The good news is that interest rates likely won’t increase much from here:

In the next downturn, central banks will be forced to lower interest rates and print more money to pay the debt.

But that means US (and European) debt will become less attractive to foreign governments.

Instead, these sovereign investors could turn to tangible assets - like stocks, real estate, or gold.

Central banks have already been buying gold at a faster rate than ever before in history.

But at 2036, we propose that a new contender to gold has emerged: bitcoin.

Bitcoin is digital gold. And in many ways, it’s superior to gold:

From an investment perspective, bitcoin has a lot more upside than gold. All the gold in the world is worth $10 TRILLION; Bitcoin just $520 billion.

El Salvador has already made Bitcoin legal tender. More countries are likely to follow suit.

This is what Arthur Hayes - the king of crypto trading - has been talking about for years.

There’s too much debt globally in the system.

To afford interest, governments will have to lower their interest rates, making their debt less attractive.

Instead, investors will turn to risk assets with higher returns. And bitcoin will be at the forefront of that trend.