Ray Dalio worries about high inflation
Loss of purchasing power: “Cash is garbage”
Dalio praises the potential of cryptocurrencies
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The strong demand for goods and services as well as bottlenecks in the global supply chains after the Corona crisis are currently causing inflation to get out of hand, so that it even climbed to a 40-year high in the USA in March. The inflationary pressure is also increased by the Ukraine war, because the sanctions against Russia make raw materials more expensive and fuel inflation further.
Ray Dalio criticizes cash
Ray Dalio, the founder of the world’s largest hedge fund firm, Bridgewater Associates, has come down hard with cash in the face of this development. As he explained during the meeting of the World Economic Forum (WEF) in Davos on the CNBC show Squawk Box: “Of course cash is still garbage”. And further: “Do you know how quickly cash loses its purchasing power?”
“When I say cash is garbage, I’m referring to all currencies that are related to the euro or yen,” the billionaire said. “All of these currencies will depreciate relative to goods and services, as they did in the 1930s,” Dalio said.
The 72-year-old confirmed one of his statements from 2020. At that time he had advised investors to “get out of cash” because this was “garbage”.
Bitcoin is “digital gold”
In the current uncertain economic environment, Ray Dalio prefers safe forms of investment such as real estate and precious metals – but above all Bitcoin, which he described to CNBC as “digital gold”. “I think that digital gold, a kind of bitcoin, is something that has a small advantage over gold and over other assets,” the hedge fund manager told the CNBC show. And further: “I think that blockchains are great”.
Dalio moved away from his initially skeptical stance on the crypto sector some time ago and even announced his personal investment in Bitcoin in May 2021. He was initially put off by the high volatility of Bitcoin, but ultimately he was convinced by the enormous profits that the world’s most popular cryptocurrency has been able to achieve in recent years. “I believe in blockchain technology; there will really be this revolution, so blockchain deserves trust,” Dalio explained in an interview with “MarketWatch” in December, explaining why he is now optimistic about Bitcoin. In addition, he had already expressed the opinion during this interview: “Bitcoin is like gold, even if gold has already established itself as a first-class alternative to fiat money.”
Editorial office finanzen.net
Image credits: Anja Niedringhaus/AP, CNBC/Getty Images