|Bridgewater founder Ray Dalio, Bridgewater website|
I recently discovered (after about 3 million other people) a thirty minute YouTube video that Mr. Dalio produced to explain fundamentals of what he refers to as the economic machine.
This video, which he narrates, has been translated into several languages and viewed over 3,200,000 times. The content begins slowly with financial concepts that could be embraced by most eighth graders, but progresses to explain the primary levers that policy-makers use to manage and stimulate the economy. You can find it here.
There are numerous lessons cleverly and clearly explained here. Example: I hadn't appreciated why economists seem obsessed with Wage Growth until I watched this simple animated video. (The importance of wage growth has less to do with the oft-used and sometimes politically-charged phrase, "income inequality" and more to do with the masses ability to consume and thus deflate credit bubbles).
Also, you may come away thinking differently about the notion of Credit, which Mr. Dalio asserts, "...is the most important part of the economy and probably the least understood". Finally, what Mr. Dalio refers to as a "beautiful deleveraging" is the type of soft landing we all pray for to avert the "social disorder" some of us (like me) have worried about for years. The antidote, according to Mr. Dalio, is for policy makers to apply the correct mix and emphasis to each of the four economic forces illustrated below.
|YouTube video, "HOW THE ECONOMIC MACHINE WORKS" by Ray Dalio|