Ray Dalio Sees an Inevitable Shift to MMT

May.02 -- Benjamin Mandel, global strategist at JPMorgan Asset Management, and Bloomberg's Stephanie Flanders examine comments from Bridgewater Associates Co-Chairman and Co-Chief Investment Officer Ray Dalio on the inevitability of modern monetary theory replacing the current form of central banking. They speak on "Bloomberg Daybreak: Americas."

[Achrononmaster]

Dalio at least got the headline right: you shift in policy (monetarism -> MP3) but you cannot "shift to MMT", since we already have the rules in place that MMT describes. We are just not using them correctly. Bottom line is fiscal policy is more powerful than monetarist policy. MMT is not a new regime we shift to, it is a lens on what we could be doing with the current monetary system already in place (taxes drive the currency & government deficits are the non-government surplus, so deficits are not the bogeyman, Treasury cheques never bounce, the US government cannot ever run out of US dollars: It's the scorekeeper - gov spending is the credit, taxes are the debit).

[TheJMan]

MMT is not a set of policy prescriptions, it's merely the description of how our monetary/currency system has operated ever since we left the gold standard.

[CloverPickingHarp]

No essay link in the description... lazy channel management. No wonder you guys are going under.

[Frtysxity]

It was refreshing to hear someone on Bloomberg admit that quantitative easing (ie inflation) is in part responsible for our current income/wealth inequality. It's something that I've heard a lot about from alternative sources but never accepted to so freely from a major network.

[lelandtsnyder]

MMT is basically printing money to maintain full employment while ignoring the reasons the money is collecting in the hands of the few. It is not new, it has been going on since this new century began, the only thing new is that they are "enshrining" it as an actual policy.

A MMT theorist will say, how dare you say we are printing money, we are only changing the 1's and O's of the bits that represent the bank statement of (e.g. foreign creditors due).

In such a case the foreign creditors then go to the ATM and dollars spit out and the MMT theorist says "that has nothing to do with me!".

Trying to keep full employment is in general a worthy goal, with out addressing the underlying inequities or need for change it will lead to 99% of the population becoming MMT junkies living paycheck to paycheck because the underlying issues are not being addressed while goods like land and housing things of a truly limited quantity will experience runaway inflation.

[Sagittarius-]

MMT isn't an alternative policy. It is simply a label for how banking works. This video is garbage.

[robertgorden]

When monetary policy integrates with fiscal policy the thin facade of independence that the US Central Bank claims to have, will dissolve into nothing. All government policies having to do with money and credit will be clearly political.

[alensaric]

Ray Dalio had predicted this 10 years ago in his report How The Economic Machine Works. He also recently made a prediction that as a result of MMT, the dollar will lose 30-50% of its value through printing money to directly finance the deficit.

[utkarshanand]

I’ll start pricing my products in bitcoin.

[jefflombardi]

Dollar will eventually collapse. Sad to watch the slow motion collapse happen before our eyes.

[mchan]

Read the article, this is not exactly what he says...

[GlendaBlumenthal]

my previous comment was censored: I called for ray dalio smiling more

[dannywindham]

What mr. Dalio doesn't understand we don't have to implement mmt. We've had mmt since 1971. We just been using monetary policy. Instead of Physical policy. Which is The neoliberal Game Plan.

[cnsmiles]

We have already sampled MMT and look at us now. $22 trillion in debt, a weaker dollar and bloated asset prices that help the rich. What do you think QE is? Its a tamed version of mmt. Why are we talking about these democrat policies as new policies when in fact we have sampled every single one of them and they have all failed. UBI=welfare, medicare for all=medicaid, free education =pell grants. I can go on and on. We already are quasi socialist country that spends money like drunk sailors. Its as if FDR and LBJ never existed. Take what does not work and make it bigger with no structural changes! Does not matter. Upon implementation of MMT, bond holders will bail once the US credit rating drops to junk level. It would fail on day one. Some people are so stupid they really dont know how our debt gets paid for. They will be no debt ceiling raise Once we lose that privilege(USD reserve currency).

[neilanderson]

Dalio's essay was reportedly predicting a new policy dubbed "MP3" ... where's the essay?

[lyni]

The main problem is greed. Pure greed.

[seensnakes]

Promoters of MMT are aware of the different types
of money but I have many videos where they say: "MONEY COMES FROM THE
GOVERNMENT". Anyone that does not acknowledge the bulk of money that is
created by private commercial banks have a faulty theory. Look at the
present data, base money stands at 1.70 trillion and M2 at 14 trillion.
Looking further at data we could see that the newly created bank money
(called endogenous money by some economist) DOES NOT COME FROM LENDING
DEPOSITS. This means that the Fractional Reserve lending model of money
expansion is wrong because fractional reserve lending uses deposit as
their catalyst.

What is really happening is that banks are hemorrhaging inflationary
money by converting IOUs into cash. In order for Gold/ Silver
certificates to become legal tender the courts stated that an
unconditional promise to pay is exactly the same as cash. The
commercial banks took it a bit further. Unless you close that spigot of
inflationary and deflationary cash your MMT theory is utter crap.


here is the sentiment of the courts regarding promissory note. Nearly
every court system in the world have this kinds of ruling. They don't
address consideration but here it is:


Lord denning stated
"We have repeatedly said in this court that a bill of exchange or a
Promissory Note is to be treated as cash. It is to be honoured unless
there is some good reason to the contrary" (see per Lord Denning M.R. in
Fielding & Platt Ltd v Selim Najjar [1969] 1 W.L.R. 357 at 361;
[1969] 2 All E.R. 150 at 152, CA)
Another of Lord denning’s rulings stated that a bill of exchange once tendered has to be treated as cash.
The principle is that a bill, cheque or note is given and taken in
payment as so much cash, and not as merely given a right of action for
the creditor to litigate a counterclaim (see Jackson v Murphy [1887] 4
T.L.R. 92).
First of all it is important to remember that the Bills of Exchange Act
1882 (and many Statutes subsequently) consider a Promissory Note to be
the same thing as "cash".


BTW do you guys get paid by banks to side track people?

[IsraelMejiaJr]

The Fed must nationalize failing corps when the next downturn arrives....forget slashing rates....buy at bargain prices and liquidate at a later time for a

[justwondering]

It’s so insulting to the President for this woman to say Dalio is channel Donald Trump but with a little more intellectual rigor. Excuse me, but it’s going to be another example of Trump being right first and a lot of what is happening in other places, such as monetary policy, is a direct result of the variables Trump brought to the world that were nonexistent previously. Give the man credit, he has been right about a lot of things that were unpopular at the time but are proving out to be true.

[gregrichey]

I believe that retiring baby boomers around the world are also affecting income inequality numbers . Older people start pacing them selves on spending and money does not circulate as much for them and that results in less opportunity for the younger folks. Having said that I believe that central bankers are not really concerned about the economy as long as they are allowed to print the money and finance the debts of wars. They have a no lose business model.