Ray Dalio believes that Japan needs another "big round" of stimulus

Hedge fund legend Ray Dalio stated on Friday 20 of September 2013, that the Japanese economy will need another huge round of stimulus to boost sluggish growth, and some emerging markets are headed for a crisis.

Ray Dalio, chairman and CIO of $150+ billion firm Bridgewater Associates, one of the world's largest hedge funds, was speaking at the Japan Society in midtown Manhattan.

"The effects are going to wear off," Dalio said, about prior stimulus measures. BOJ is "going to have to do another big round of purchases," he shared.

In a 30 minutes conversation, Ray Dalio addressed important issues in economies like China and France. He were an optimist about investing in emerging markets, especially in equities, which dropped like a rock this year. According to him emerging markets will not be an "an attractive place" to invest this year "given flows and pricing."

He said emerging markets face "a major balance of payments problem" that will eventually lead to significant problems. It seems that Kyle Bass and other great hedge fund managers share the same view, as some of them expect either India or some other country to go into a crisis mode.

“We are going to have the emerging market crisis," Ray Dalio said during a Q&A period.

India should "prepare for the worst" since it has been one of the biggest beneficiaries of foreign capital flows that are already bypassing emerging market equities, he said.

As for Europe, Dalio said that France is of particular concern to him since "it has not dealt properly with debt to income ratios rising."

Update: There is information that Ray Dalio and Bridgewater Associates went long treasuries yesterday, and even though we don’t know whether its short-term or medium-term trade, it’s worth taking notice as some other prominent managers like Marc Faber also like treasuries short-term and believe they are due for a rebound.

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.

Ray Dalio - How The Economic Machine Works

The economy works like a simple machine.

But many people don't understand it— or they don't agree on how it works — and this has led to a lot of needless economic suffering.

I feel a deep sense of responsibility to share my simple but practical economic template. Though it's unconventional, it has helped me to anticipate and sidestep the global financial crisis, and has worked well for me for over 30 years.

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.

RAY DALIO: There's No Sensible Reason Not To Own Gold

"I think gold should be a portion of every one's portfolio to some degree because it diversifies the portfolio. It is the alternative money." - Ray Dalio

"Gold is a currency. Throughout the history, I won't tell you in length, money was like a check in a checkbook and what you would do was get your gold and gold was like a medium. So gold is one of the currencies-- We have dollars, we have euros, we have yen and we have gold.

Now it doesn't have the capacity. The capacity of moving money into gold in a large number is a extremely limited. So the players in this world that I have contact with that move that money really don't view gold as an effective alternative, but it could be a barometer and it is an alternative for smaller amounts of money.

There's no sensible reason not to have some. If you're going to own a currency, it's not sensible not to own gold. Now it depends on the amount of gold. But if you don't own, I don't know 10%, if you don't have that and that depends on the world, then there's no sensible reason other than you don't know history and you don't know the economics of it.



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.