Ray Dalio

So think of it as going into your doctor and having him give you your test results and how much plaque is in there and what it's looking like and how you did on your stress test and what your arteries are looking like and what your condition is. That's what the first measure is. The second is you're in a seizure.

In other words, now, so that second measure of the debt is exhibiting, okay, it's now happening. And happening means things like you're seeing the selling, you're seeing the spreads widen. In other words-

In other words, now, so that second measure of the debt is exhibiting, okay, it's now happening. And happening means things like you're seeing the selling, you're seeing the spreads widen. In other words-

the interest rates rising on the long end without the short end, you're seeing that the central bank is put into that position of having to make the difficult choice of coming in there and monetizing everything, and then credit problems and debt monetization, because you're in the middle of it. That's what the one on the right means.

the interest rates rising on the long end without the short end, you're seeing that the central bank is put into that position of having to make the difficult choice of coming in there and monetizing everything, and then credit problems and debt monetization, because you're in the middle of it. That's what the one on the right means.

So what we have is, if I'm speaking to you as the government policymakers, your condition is very bad. Right. Okay. You're not in the middle of it now. In other words, we're not seeing that particular dynamic transpire, but you have to change your... You have to change your behavior. You have to maybe have a stent put into the equivalent. So you asked about what that is, okay?

So what we have is, if I'm speaking to you as the government policymakers, your condition is very bad. Right. Okay. You're not in the middle of it now. In other words, we're not seeing that particular dynamic transpire, but you have to change your... You have to change your behavior. You have to maybe have a stent put into the equivalent. So you asked about what that is, okay?

Okay, here's what it is.

Okay, here's what it is.

Sure. Like that chart, if you go back to that chart, Think about that chart as being your plaque, so to speak, in the arteries and the debt service. So you can calculate all those numbers and you know what the picture looks like. And that is a stability. So number one is stability. I call it my 3% solution.

Sure. Like that chart, if you go back to that chart, Think about that chart as being your plaque, so to speak, in the arteries and the debt service. So you can calculate all those numbers and you know what the picture looks like. And that is a stability. So number one is stability. I call it my 3% solution.

The solution is you must cut the deficit, which is the equivalent of bonds selling, down to 3% of GDP. And it's 7.5% expected. Now, different people have different views as to how to cut it. Forget it. I don't really care. Just you have to have a unified agreement. Everybody in Congress and the president and so on should pledge to do that. And then the question is how to do it.

The solution is you must cut the deficit, which is the equivalent of bonds selling, down to 3% of GDP. And it's 7.5% expected. Now, different people have different views as to how to cut it. Forget it. I don't really care. Just you have to have a unified agreement. Everybody in Congress and the president and so on should pledge to do that. And then the question is how to do it.

But they should know that number.

But they should know that number.

Yeah, well, it's yes, because with the continuing the tax cuts, Trump tax cuts, that'll be 7.5%, and you want to get it down to three. And it sounds draconian, but we did that kind of change from 1991 till 1997. And the key, there are three keys to this. do it soon, fast, when the time is good, when the economy's good. In other words, do it now. Now. Okay.

Yeah, well, it's yes, because with the continuing the tax cuts, Trump tax cuts, that'll be 7.5%, and you want to get it down to three. And it sounds draconian, but we did that kind of change from 1991 till 1997. And the key, there are three keys to this. do it soon, fast, when the time is good, when the economy's good. In other words, do it now. Now. Okay.

The temptation is going to say, well, we're going to ease into this and we're going to be there and we're going to do it in three years from now. But if you have a bad economy, you cannot do it. Okay. And that's the worst. So we have the best economy and the sooner you do it, the more you're going to do it. So 3% solution, Do it now and recognize that you have to deliver it.

The temptation is going to say, well, we're going to ease into this and we're going to be there and we're going to do it in three years from now. But if you have a bad economy, you cannot do it. Okay. And that's the worst. So we have the best economy and the sooner you do it, the more you're going to do it. So 3% solution, Do it now and recognize that you have to deliver it.

So if you're having, let's say, cost cuts in government, You have to own the number. So everybody's got to pledge 3%. Now, there'd be arguments as to how to get there. But you have to own the number, so much so that you'd say, if it's not 3%, throw me out of office because I've got to deliver that number. So if somebody, if government cost, expense, cutting...