Ray Dalio

because I'm losing money to inflation.

So now you have the central bank wanting to rectify that imbalance by, you know, real interest rates were minus 1.7%.

Yes, if I look at inflation index bonds as an indicator,

or other indicators, I'm losing percentage points to inflation by holding that bond.

And people realize that, well, you don't want to do that.

And then the other side of it was you want to buy and borrow and buy stuff.

because, you know, money's free.

So companies borrow and buy stuff, and individuals borrow and buy houses, because interest-only loans on the houses, I mean, like, okay, I can buy a house, I can buy an apartment.

And so, but that creates the imbalance where it's terrible to be a lender

and a creditor.

And it's good to be a borrower and do that.

So that imbalance takes place.

It produces inflation.

And then when it produces inflation and so on, and then you say, I don't want to own these things anymore.

And also, the Federal Reserve says, I better fight inflation.

They change things.

And so by raising interest rates to levels,

in which it goes from minus 1.7% in inflation index bonds to plus 1.7%, and it raises the short-term interest rates, real interest rates, much higher, then, lo and behold, all the people who did all those things

get hurt, okay?

They borrowed, they bought the bonds, they bought all of those things and all of those debt instruments, and also companies.