Ray Dalio

To take Japan, for example, if you were a holder of Japanese bonds, you lost about 80% of your money relative to gold and about... 60% relative to U.S. bonds because you received an interest rate that was 3% less than the corresponding interest rate in the United States. So you lost the interest rate.

And interest rates in the United States, as you know, were very low relative to inflation for most of that time. Plus, you had a depreciation in the currency. So you lost a ton of money in the debt that way because the central bank came in and printed the money. It's very bad for holders of the debt. And it's a basic thing. You don't have to even get too technical.

And interest rates in the United States, as you know, were very low relative to inflation for most of that time. Plus, you had a depreciation in the currency. So you lost a ton of money in the debt that way because the central bank came in and printed the money. It's very bad for holders of the debt. And it's a basic thing. You don't have to even get too technical.

It's just a supply-demand thing, you know?

It's just a supply-demand thing, you know?

While gold has gone up and Bitcoin has gone up, So that is that kind of market action I'm talking about. And you've seen it in other countries too. The UK, very classic. The dollar has been a relatively strong currency, but not measured in gold or Bitcoin. So all currencies have gone down. And then you've had that dynamic you're talking about.

While gold has gone up and Bitcoin has gone up, So that is that kind of market action I'm talking about. And you've seen it in other countries too. The UK, very classic. The dollar has been a relatively strong currency, but not measured in gold or Bitcoin. So all currencies have gone down. And then you've had that dynamic you're talking about.

And you see it also in like Sterling is a good example. Sterling has gone down while UK bond rates have gone up and central banks have held it steady. And so you see it in the market action. You also see it in terms of

And you see it also in like Sterling is a good example. Sterling has gone down while UK bond rates have gone up and central banks have held it steady. And so you see it in the market action. You also see it in terms of

who the buyers are, and who you've seen central banks, for example, and sovereign wealth funds shift to have lesser amounts of debt, bonds, and so on, at the same time as they've accumulated gold or hard values. Now, gold is the third largest reserve currency, by the way. Dollars, euros, gold, and then yen. Yeah, you're seeing that supply-demand shift.

who the buyers are, and who you've seen central banks, for example, and sovereign wealth funds shift to have lesser amounts of debt, bonds, and so on, at the same time as they've accumulated gold or hard values. Now, gold is the third largest reserve currency, by the way. Dollars, euros, gold, and then yen. Yeah, you're seeing that supply-demand shift.

And it's partially for all the reasons we're talking about and also partially because of issues like geopolitical issues. Countries sometimes worry about sanctions. China is worried about holding bonds. You would, U.S. bonds. Japanese bought a lot of bonds. Even as a percentage of portfolios,

And it's partially for all the reasons we're talking about and also partially because of issues like geopolitical issues. Countries sometimes worry about sanctions. China is worried about holding bonds. You would, U.S. bonds. Japanese bought a lot of bonds. Even as a percentage of portfolios,

The bonds themselves have become such a large, US treasury bonds and US debt has become such a large part of the portfolio that it's even from a portfolio rebalancing point of view, you don't want so much concentration. All of those factors are in play for the supply, demand and bonds. That's why I emphasize, you have to look at the supply and demand of bonds.

The bonds themselves have become such a large, US treasury bonds and US debt has become such a large part of the portfolio that it's even from a portfolio rebalancing point of view, you don't want so much concentration. All of those factors are in play for the supply, demand and bonds. That's why I emphasize, you have to look at the supply and demand of bonds.

First of all, the United States and countries like China, you see that particular dynamic, China, Japan, They're all educational, and that means that the bonds, the debt are bad assets. So then where you store it is in those assets that benefit rather than suffer from the reduced value of money and the buying of it. And obviously you look at money and what is an international money.

First of all, the United States and countries like China, you see that particular dynamic, China, Japan, They're all educational, and that means that the bonds, the debt are bad assets. So then where you store it is in those assets that benefit rather than suffer from the reduced value of money and the buying of it. And obviously you look at money and what is an international money.

That is why gold is in it. And then there's a question of, you know, Bitcoin or others are a conversation. We can digress into that. But it can be, ideally, it's international, it's mobile. Ideally, it's relatively private. So it's relatively secure because in history, There's the value part of it, and then there's the confiscation part of it, too, in some fashion or another.

That is why gold is in it. And then there's a question of, you know, Bitcoin or others are a conversation. We can digress into that. But it can be, ideally, it's international, it's mobile. Ideally, it's relatively private. So it's relatively secure because in history, There's the value part of it, and then there's the confiscation part of it, too, in some fashion or another.

That confiscation can easily take the form of taxing on holding it. For example, one of the problems with real estate, besides the fact that it doesn't move, so you can't use it internationally, is it is a readily taxable asset. It's there. It's there. And therefore, they won't take it and you can get it. We have to understand that taxes and confiscations are one and the same.