Speaking at the Wall Street Journal’s “Future of Everything Festival” online summit on Tuesday, Ray Dalio, founder of Bridgewater Associates, the world’s largest safe-haven fund, said Biden’s ambitious stimulus plan raises the risk of inflation and dollar depreciation. Biden’s ambitious stimulus plan raises the risk of inflation and dollar devaluation.
Dario said the Biden administration’s economic policies, including the $1.9 trillion epidemic bailout signed in March and the currently proposed $2.3 trillion infrastructure plan, risk letting too much money flow into the economy and creating a bubble. He also predicted that the lack of buyer demand for government bonds would cause the Federal Reserve to continue its expansionary policies.
The biggest problem is the amount of money that has been generated and put into the system,” Dario said, adding that the central bank should balance this risk carefully, and that productivity is “the key to preventing the economy from overheating. Dario said he had exchanged views with Biden administration officials, but declined to give details.
He also said: “There are two kinds of bubbles. There is a debt bubble, the bubble will burst when you can’t pay back the money. There’s another kind where there’s too much money, not enough austerity, and the money will depreciate. I think we’re in the second kind of bubble.”
According to Forbes, the well-known safe-haven fund manager Dario is worth $20.3 billion.