Ray Dalio

Let's say, and the government can print the money,

But if the money's hard, if that's going to be good money that's coming back, it's going to be hard for those entities to pay back because it's a lot relative to their income and cash flows to pay it.

And that means that the default risk rises.

However, because...

you're holding that, it means that the debt will be bad one way or another.

It's either bad because they don't pay it and needs a haircut for them to pay it,

or because they do pay it with money that is going to be printed to come back.

So when you look at that, and that problem occurs

when there's a lot of debt assets and a lot of debt liabilities.

So think of it this way, just want to make this clear.

When there was the position that interest rates got a lot below the inflation rate, you're losing buying power.

There's no good reason to own that.

And there's a change in psychology because before there was I own bonds.

The bonds go up in value as interest rates go down.

So I'm getting a price appreciation, even though I'm getting, you know, let's say a low interest rate.

But inflation isn't a problem until it's a problem.

Then when it's a problem, because they print so much money and they put it out, then inflation goes up and a light bulb goes off.

That light bulb used to be, okay, how much am I earning?

Okay, I'm not earning much, but it's okay, the price of the bond or whatever's gone up, but anyway, I'm holding it and it's safe.

And then people realize it's not safe.