Ray Dalio says Cash is Still “Trash” in the Era of the Most Massive Helicopter Money Monetary Stimulation

Must Read

Bitcoin Eyeing $11800 After Intense Drop

As we saw earlier today, Bitcoin started by declining from $11349 to $11176, roughly 1.76%.

USDT Is A Game Changer For Online Poker

CoinPoker - the flagman of the industry, the biggest and the oldest pure crypto poker...

Can XRP defend its price?

Could XRP defend its price action, and rise back to $0.30? Here is my view on how...
- Advertisement -BTCClicks.com Banner
Earn Free Bitcoin

Ray Dalio still thinks that cash is trash and that it is not the best asset to hold in a world where central banks are firing up their money printers and keeping interest rates low, to zero and even in negative territory, in response to the coronavirus pandemic.

The non-interest-bearing money, Cash “will not be the safest asset to hold,” said the founder of the world’s largest hedge fund, Bridgewater Associates during a recent Reddit Ask Me Anything event on Tuesday.

Cash is not really valuable because “we are now in an era of the most massive MP3/helicopter money monetary stimulation since WWII.”

Dalio also pointed out that the government creating money and credit cannot produce goods and services or employ people.

Cash has a costly negative return

Dalio has previously said that “cash is trash” but recently in the violent sell-off in the markets, cash emerged as the king when everyone ran for flight to safety in it.

The billionaire investor explained that he believes central banks will print a lot of money and keep cash interest rates at low levels resulting in them having negative real returns.

When the coronavirus pandemic hit first, it had a negative impact on earnings and balance sheets. This resulted in the asset value to plunge making cash look comparatively attractive. However, what central banks did was they just created a ton more cash to buy debt and push interest rates further lower.

“When you think about what assets are safe to own, and you think of cash, please remember that while it doesn’t move around in value as much as other assets, there is a costly negative return to it in relation to goods and services and other financial assets that amount to about a couple of percent a year, which adds up,” he said.

In relation to gold and some stocks that will either retain or increase in value during reflationary periods, cash is not a good option to go with.

US Dollar is in “short-squeeze”

As for the US dollar in the backdrop of the Federal Reserve printing a lot of dollars, the world’s currency is now having a “short squeeze.”

“The world desperately needs dollars and, as a result, there is a global shortage of them, which supports the dollar.”

But now that the “world’s printing press” is generating more dollars, it is having a short squeeze. This squeeze, however, will eventually end because there has been enough printing of USD to satisfy the shortage of USD. Or it won’t be enough which means there will be debt defaults and restructurings that will reduce the need for dollars and weaken the USD.

The bitcoin critic also said that in the light of negative real and nominal interest rates while the central bank is printing huge amounts of money, bondholders will be increasingly asking questions, “whether the debt assets they are holding are good storeholds of wealth.”

- Advertisement -
- Advertisement -

Latest News

Wyoming Amends Insurance Code to Allow Insurance Companies to Invest in Bitcoin & other Cryptos

In the first provision of its kind, Wyoming is allowing the domestic insurers to invest...
- Advertisement -Earn Free Bitcoin

DeepTradeBot: The innovation of large companies at your service

DeepTradeBot is a collection of automated trading tools developed by Deep Neuro Networks LTD, a London, England-based company dedicated to artificial intelligence and...

Flyp.me Instant Crypto Exchange Now Supports REN Token Trading

Decentralized finance is leading the way of the cryptocurrency industry, with the REN Protocol at the front. REN Protocol is...


DATE: 07/08/2020 In a recent study carried out by the UK Gambling Commission reveals that the gambling industry has...

The Kuailian Ecosystem, Bringing Blockchain Technology To The World

10 years have passed since the birth of Bitcoin and the first use of Blockchain, a technology that has not stopped evolving,...