Bridgewater Associates Founder Ray Dalio has released an YouTube video titled “How The Economic Machine Works by Ray Dalio” for explaining the Complex Economic concepts simply using animated cartoons.
Ray Dalio explains economic related Terms, Processes and Concepts using interesting animated cartoons. After explaining all the complex Economic things, Ray Dalio concludes the video by saying that improving productivity is the only way to achieve good economy in the society.
Ray Dalio says,
So in summary, there are three rules of thumb that I’d like you to take away from this:
First: Don’t have debt rise faster than income, because your debt burdens will eventually crush you.
Second: Don’t have income rise faster than productivity, because you will eventually become uncompetitive.
And third: Do all that you can to raise your productivity,because, in the long run, that’s what matters most.
This is simple advice for you and it’s simple advice for policy makers. You might be surprised but most people — including most policy makers — don’t pay enough attention to this. This template has worked for me and I hope that it’ll work for you.
Watch below this interesting and thought provoking video below.
The detailed document behind this video “How the Economic Machine Works” can be downloaded from here.
This video creates lot of discussions in Social Media. In this reddit discussion one person had asked below questions.
- In the beginning of the video he said that in the US there is 50 trillion dollars in credit in circulation vs 3 trillion actual dollars. How does this compare to other countries? If there was a smaller credit to dollar ratio would there be less dramatic debt cycles?
- The central bank can increase and decrease credits rates. How regulated is that? and can’t that also greatly exaggerate the debt cycles?
- I understand that printing too much money in a deleveraging is harmful but what is the “right” amount that will make it “beautiful”?
This video gets lot of positive feedback from many people. Still it gets some criticism also.
it feels a little outdated as it does not touch on the globalized market and how the actions of for instance the US economy influence other economies like Europe and Asia. Also, as FollowThaWhiteRabbit mentioned, savings are not mentioned AT ALL – to me it seems they would have a strong influence on the long term debt cycle, but more so, how ‘steep’ the decline of the economy is in a recession.
In 2012, Ray Dalio appeared on the annual Time 100 list of the 100 most influential people in the world. In 2011 and 2012 he was listed by Bloomberg Markets as one of the 50 Most Influential people. Institutional Investor’s Alpha ranked him No. 2 on their 2012 Rich List.
Ray Dalio wrote a company manual called “Principles” (pdf download) to share his life and business management principles with his employees.
According to Forbes he is the 31st richest person in America and the 88th richest person in the world with a net worth of $10 billion as of March 2012.
