How The Economic Machine Works by Ray Dalio

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." [VIDEO]

If you haven't seen his video, How the Economic Machine Works, I highly recommend it: [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]

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 [VIDEO]

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: [VIDEO]

There are several levels to what is wrong. I have dedicated the last 5 years to discovering what is going on so I will try my best to condense it down. In terms of a 'shorter' business cycle view (less than 10 year perspective) to what is wrong is that we are not in a recession but in a deleverage. We haven't had one of those since WW2 so most people don't know what it is and think it is a recession. A deleverage is a once in a 100 year massive transfer of wealth event. I have put resources on what a deleverage is at the end of this reply. The long term problem is that the Fed is a private bank. This means that the US Government and American citizens do not control the Fed. Forget the façade that makes them look like a branch of Government, especially the whole Presidential appointment of the Fed Chairman. It is a private bank that gets to print money and sell it to the US Government that American citizens are forced to use. That means that the US Government and American citizens are slaves with no control over their future. Each dollar printed is a debt burden on the American people and a debasement of the current currency value. Essentially think of printing money as a way that the Fed transfers wealth from your pocket into theirs. Furthermore, I believe that the Fed manipulates the economic cycle to create wealth transfer events that they reap the benefits of. For further information look to the following: [VIDEO] [LINK] www.youtube.com/watch?v=mII9NZ8MMVM‎ [LINK] [LINK]

Anyone creates "money" every time they lend. Banks do a lot of lending, so they're definitely involved. But even opening a bar tab creates "money" (more accurately, "credit"). Here's a great video by famous investor Ray Dalio about this concept: [VIDEO]

What's interesting is that I've seen the link on HN titled "Hedge Fund Is Building an Algorithmic Model From Its Employees’ Brains", but I didn't click on it. I found it a bit silly that the WSJ doesn't name the hedge fund in question.. It's like seeing a link on Hacker News that says "This company is redesigning its architecture", and the company is Facebook. Just say "Facebook is redesigning its architecture". I shared the video about "How the Economic Machine Works" (narrated by Dalio) on Facebook yesterday.. Here's the video: [VIDEO]

It's kind of crazy that, at least in the US, personal finance is not taught so much in grade school. I had to do a lot of reading and research now in my late twenties to figure out the best way to manage the RSUs I get at work and how to plan for a home purchase and retirement. It turns out (surprise) that most financial institutions don't have regular investors' best interest in mind. Instead, they see us as customers with value to siphon out over long periods of time. Understanding how economies work[1], how financial service companies sell products, theories behind volatility and market forces, and how simple portfolio management can be goes a long way to improving an individuals ability to efficiently self-manage their finances. 1. [VIDEO]