September 21, 2012
Countries in southern Europe face "10 to 15 years controlled depression" which can cause social unrest similar to those that led to the rise of the Nazis in Germany in the 30s of the 20th century, says Ray Dalio, manager largest hedge fund in the world, said on CNBC.
"I think we will see a combination of monetary measures and printing money, which will aim to alleviate depression," said Dalio, founder of Bridgewater Associates, which manages assets of 130 billion dollars.
"At the same time we will see as lower debt levels and debt restructuring ... There will be both, as necessary to relieve the debt burden in order to achieve higher growth than bond yields, "he said.
This process, however, worry whether.
"I fear that another recession could lead to social unrest. Reducing debt levels can be very painful - it all depends on how this process is managed, "he said.
"When people's throats - rich vs. poor, left against right, the situation is very worrying. Hitler came to power in 1933 when the Great Depression reached its bottom. What was it raised tensions between ideological factions and social groups in society, "said Dalio.
The main fund Bridgewater - Pure Alpha - amounted to $ 75 billion in 2011 and reached 25% return after winning 45 percent in 2010 Since its founding in 1975, the fund has brought investors $ 50 billion.
Since the beginning of the year Pure Alpha grew by only 3.1 percent, while EUR 55 billion All Weather Fund, also managed by Dalio, a return of 12.2%. From 1 January 2012 the return on Dow Jones Industrial Average is 11%.
Whether fears that U.S. politicians will agree on the right mix of fiscal and monetary policies will lead to a new recession. "I'm worried about it because the danger is real," he said. He appreciates the U.S. "A" in the Global Competitiveness Index, compiled by Bridgewater Associates.
"We're very competitive, both Europe and Japan. Outperforms most of the emerging markets, "says Dalio. "On the other hand, China, India, Korea and Singapore are more competitive than us," he said.
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.