Some people say that the Fed is the problem. That they’ve become drunk with their own power and are messing things up for everyone. That the stimulus and low interest rates are setting us up for Armageddon.
Ray Dalio is not one of those people. He’s put the Fed’s efforts through a rigorous, Principle-d examination, and come to the obvious, radically true conclusion: Janet Yellen & co. are doing just fine.
The December 15 Bridgewater 21 page strategy document, which notes that nominal U.S. growth remains higher than interest rates. Report authors Bob Prince, co-CIO at the hedge fund, and Alex Schiller noted that as “the Fed has slowed its printing,” households and small businesses have picked up the economic slack. In other words, the bumpy and delicate path to the withdrawal of stimulus, the management of government debt and avoiding a derivatives crisis appears on track.