To create more wealth, one has to be more productive.'

'One cannot create more wealth simply by creating more money and credit.

'Governments that have the power to do so are printing money to help ease the debt burdens and help finance the expenses that are denominated in their own currencies, which will weaken their own currencies and raise their levels of monetary inflation to offset the deflation that is coming from reduced demand and forced asset sales that are happening as those that are stretched have to raise cash.'.

'The Federal Reserve is now in the strong but awkward position of running its monetary policy in a way that is good for Americans but that might not be good for others around the world who are dependent on dollars.' 'A reserve currency is probably the most important power to have, even more than military power,' he wrote after comparing recent US efforts to respond to the global coronavirus crisis with 'helicopter money' to the announcement President Franklin Roosevelt made on Mawhen he abandoned the gold standard.ĭespite accounting for only around 20 percent of world gross domestic product, the US still accounts for about 60 percent of global reserves and about half of international transactions, he noted and this is why the dollar and the dollar-based monetary and payments system still 'reign supreme' and are 'outsized' relative to the size of the economy. While the fate of most money may repeat itself in long-term cycles that can last longer than the average lifespan, being the country that can print reserves still comes with benefits, with Dalio noting that the US dollar accounts for about 55 per cent of international transactions.

In starting starting with a simple question – 'What is Money?' – Dalio comes away with a number of observations: most money has no intrinsic value it's not wealth and while money printing isn't necessarily bad, central banks always end up devaluing and most currencies are ultimately destroyed.

'Through this triangulation, we came away with a richer understanding of how the whole machine works.' 'They lacked adequate practical understanding of how money and credit work, and I lacked adequate practical understanding of how politics and geopolitics work,' Dalio wrote in the 13,000-word essay sprinkled with simple language and bold print in an attempt to make it easier and shorter to read. The billionaire investor and founder of Bridgewater Associates said he's working with both historians and political experts to connect pieces of the past together to better understand the future. 'You need to understand how money, credit, and debt work,' Ray Dalio writes in his latest post in a series previewing an upcoming book he's titled The Changing World Order.

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