Clenow Futures Intelligence Report

Clenow 

Futures Intelligence Report

December 14, 2012

Bridgewater’s Dalio: Expect Austerity, Rising Interest Rates in 2013

Next year will bring austerity and rising interest rates, predicts Ray Dalio, founder of Bridgewater Associates, the largest hedge fund manager.

Plus, the Fed is out of bullets.

Speaking at The New York Times DealBook conference, Dalio said austerity is coming due to Washington's inability to solve the fiscal cliff, Business Insider reported.

The Fed, meanwhile, has fired its “bazooka” and its continuing quantitative easing will have little impact.

Yields, already at rock-bottom levels, can't go down any more and will begin rising next year, probably in late 2013, he said, according to Business Insider.

"We're facing austerity. And growth is flagging. This is an unprecedented risk the economy is facing — a slowdown with very little room to maneuver."

Still, Business Insider reported that Dalio predicts stocks will outperform bonds next year.

Dalio agrees with other top investors who believe interest rates will pop a bond bubble and create a moneymaking opportunity when the finally increase, CNNMoney reported.

Source: MoneyNews

Ray Dalio is an American businessman and founder of Bridgewater Associates. Bridgewater Associates has since attracted many clients including pension funds and is currently (as of January 2012) the largest hedge fund in the world with nearly $120 billion under management.