How The Economic Machine Works by Ray Dalio

Just a +1 comment, but thanks for sharing this, it’s very much worth reading, the foreword and overview is very much written in layman language. I might try and dig into the rest of material as well. For an even simpler but informative intro to debt cycles check out this video by Ray Dalio, it’s the best layperson explanation of debt I’ve ever seen: ▶ this video

I find this very useful, every now and then i make it a point to watch his video to remind myself of the macro view on things ▶ this video

If you haven't seen his video, How the Economic Machine Works, I highly recommend it: ▶ this video Also the way he runs Bridgewater is really interesting. It's structured with the goal to surface the best ideas and figure out which opinions are most likely to be correct. It's an "idea meritocracy" and a culture of radical transparency. Everything is recorded and made available to everyone else in the company. Employees are very candid, brutally honest, even with the CEO (Ray). He says a lot of people churn out in the first year or so, but those that get used to it love it and can't imagine working another way. His Ted Talk goes into quite a bit of detail about how it all works: link His book Principles lays out the foundation. Excerpt: link Videos: link

This is a great overview done by Ray Dalio, founder of Bridgewater Associates; one of the world's largest hedge funds. "Created by Ray Dalio this simple but not simplistic and easy to follow 30 minute, animated video answers the question, "How does the economy really work?" Based on Dalio's practical template for understanding the economy, which he developed over the course of his career, the video breaks down economic concepts like credit, deficits and interest rates, allowing viewers to learn the basic driving forces behind the economy, how economic policies work and why economic cycles occur." ▶ this video

"The economy" is just the word we use for transacting between one another. Whether individuals, or businesses, or a combination. The economy as it exists in popular culture is just a tool to bludgeon people over the head into acceptance of their pre-determined role/rank in society (and softly "nudge" their decision making in the direction of submission to larger, more wealthy entities/individuals). It's a Girard-style scapegoat designed to be a target for all of the predictable vitriol and confusion of an unpredictable and unknowable future. The thing that helped me think less in terms of "oh no the economy is bad, panic" and more so in "okay, what are you going to do about it" was this [1]. [1] ▶ this video

Continue down the chain on your house example. Imagine in each case instead of transferring money in bank accounts, people do the work on credit. Add up all the credit at the end of the chain. Then go back and add up all the bank account balances in the "pay with money transfer". It'll be the same (except for the fraction). Now, go look at a bunch of public company balance sheets - you'll see payables and receivables all the way down from mining companies to retailers. One long chain of credit. They could have all borrowed money from banks instead and have zero trade receivables throughout the entire chain. The point of "money creation" is to enable economic activity. Credit does the same thing. In fact, your "money" at the bank is just a receivable from the bank. Ray Dalio has a quarter decent explanation of it here: ▶ this video

Austerity, taxing the rich, restructure debt, printing money. This video by Ray Dalio explains it much better than I ever could: ▶ this video

It does not cover everything you asked for, but Ray Dalio has a excellent 30 min. video that explains ELI5 how the economy works: ▶ this video

That’s the gist of capitalism and why we have boom and bust cycles (in the short and long). Ray Dalios series on the topic of capitalism being funded by debt is quite approachable. ▶ this video

Half in 30 years? That’s pretty good! Ethereum fell by that much in a couple weeks. On the way up in a bull market it’s all roses, but in a bear market, these things can crash hard. Money losing value gradually — Demurrage — makes people actually spend money rather than hoard it. If you want the money to earn interest, you will have to take some risk. Invest in some assets. Usually, stocks or real estate or (finally thanks to the JOBS act) new startups. I don’t know why people have “fat bank accounts”. Money isn’t meant to be stored. That’s a racket by the banks, along with the idea that you have to buy a home instead of renting. If you can rent and buy other assets that you understand better than real estate, then do that. This is not magic .. money has to come from somewhere. It usually comes from banks themselves — who lend it to people and businesses who believe that they can pay back MORE money ! The only way everyone can pay back more money than is in existence is if the money supply is increased in the meantime. So inflation happens. The only alternative is having lots of people default and restructure their loans to owe less. This is what Ray Dalio says can be “a beautiful deleveraging”. I don’t buy it… Learn how it all works: ▶ this video

Whenever I want to try and understand what may be happening in the economy, I rewatch[1] Ray Dalio’s 2013 video on how the economic machine works. Bits about a “recession” come up around the 12-18min mark with relevant info beyond. That said, I don’t know enough to map/equate these simple types of economic explanation with current actual state. [1] ▶ this video

I found this 30 min summary by Ray Dalio really helpful. He breaks down how an economy works in a clear and concise way. Stupid simple like me. :) ▶ this video I also found this recent interview with him had a number of interesting angles on the state of things in the US/world as a whole. link Would definitely love to hear counter points to these to continue improving my thinking.