{"id":49424,"date":"2019-11-05T17:00:11","date_gmt":"2019-11-05T22:00:11","guid":{"rendered":"https:\/\/olduvai.ca\/?p=49424"},"modified":"2019-11-05T17:01:50","modified_gmt":"2019-11-05T22:01:50","slug":"the-world-has-gone-mad-and-the-system-is-broken","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=49424","title":{"rendered":"The World Has Gone Mad and the System Is Broken"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/media.licdn.com\/dms\/image\/C4D12AQHljw-ZJ0Jk4A\/article-cover_image-shrink_600_2000\/0?e=1578528000&amp;v=beta&amp;t=2tSPu9MOjSXKda-RstgNjZ-_53sVSgYmtAhg28qaFMI\" alt=\"The World Has Gone Mad and the System Is Broken\"\/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.linkedin.com\/pulse\/world-has-gone-mad-system-broken-ray-dalio?articleId=6597520880811724801#comments-6597520880811724801&amp;trk=public_profile_article_view\">The World Has Gone Mad and the System Is Broken<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">I say these things because:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Money is free for those who are creditworthy because the investors who are giving it to them are willing to get back less than they give.\u00a0More specifically investors lending to those who are creditworthy will accept very low or negative interest rates and won\u2019t require having their principal paid back for the foreseeable future.\u00a0They are doing this because they have an enormous amount of money to invest that has been, and continues to be, pushed on them by central banks that are buying financial assets in their futile attempts to push economic activity and inflation up.\u00a0The reason that this money that is being pushed on investors isn\u2019t pushing growth and inflation much higher is that the investors who are getting it want to invest it rather than spend it.\u00a0This dynamic is creating a \u201cpushing on a string\u201d dynamic that has happened many times before in history (though not in our lifetimes) and was thoroughly explained in my book\u00a0<em>Principles for Navigating Big Debt Crises<\/em>.\u00a0As a result of this dynamic, the prices of financial assets have gone way up and the future expected returns have gone way down while economic growth and inflation remain sluggish.\u00a0Those big price rises and the resulting low expected returns are not just true for bonds; they are equally true for equities, private equity, and venture capital, though these assets\u2019 low expected returns are not as apparent as they are for bond investments because these equity-like investments don\u2019t have stated returns the way bonds do.\u00a0As a result, their expected returns are left to investors\u2019 imaginations.\u00a0<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The World Has Gone Mad and the System Is Broken I say these things because: Money is free for those who are creditworthy because the investors who are giving it to them are willing to get back less than they give.\u00a0More specifically investors lending to those who are creditworthy will accept very low or negative [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[88,124,195,273,426,536,558],"class_list":["post-49424","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bonds","tag-central-banks","tag-debt","tag-equities","tag-inflation","tag-money","tag-negative-interest-rates"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49424","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=49424"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49424\/revisions"}],"predecessor-version":[{"id":49425,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/49424\/revisions\/49425"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=49424"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=49424"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=49424"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}