Friday, March 7, 2014

Investment secrets and economic theories ~ Ray Dalio

Bridgewater is the largest hedge fund in the world, so it makes sense to understand how its founder views the mechanics of our economy.   Ray Dalio created this simple but not simplistic and easy to follow 30 minute, animated video that explains, how the economy really works?

To understand demand properly, you must know whether it is funded by the buyers' own money or by credit from others.

Research paper pdf 1. How the Economic Machine Works 

Research paper pdf 2. Debt cycles

Research paper pdf 3. Productivity

Based on Dalio's practical template for understanding the economy, which he developed over the course of his career, the video breaks down economic concepts like credit, deficits and interest rates, allowing viewers to learn the basic driving forces behind the economy, how economic policies work and why economic cycles occur.

Paul A. Volckerthe former Fed chairman, a fan of the cartoon, described it as “unconventional but it casts strong light on how the economy actually works, with its history of repetitive and ultimately destructive excesses in credit creation. The analysis points the way to practical ways central banks and governments can ease the pain of defaults and deleveraging.

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