Ray Dalio vs. John Mauldin: The Great Debate

An extraordinarily important debate has taken place between two of the world’s most influential economic thinkers:

Ray Dalio, the founder of the legendary hedge fund, Bridgewater Associates, and

John Mauldin, the publisher of “Thoughts From The Frontline”, one of the world’s most widely read financial newsletters.

This debate can be described as:  MP3 vs. VAT

It is enormously important because the outcome of this debate could determine whether our economic future is prosperous or impoverished.

On May 2nd, Ray Dalio published an article entitled, It’s Time to Look More Carefully at “Monetary Policy 3 (MP3)” and “Modern Monetary Theory (MMT)”.  There he wrote that in the next economic downturn central banks would be forced into Monetary Policy 3, MP3, which will be fiscal and monetary policy working together – with fiscal policy producing deficits that are monetized by the central bank. 

He added that he believes MP3 is inevitable and that it will be the best policy option available under the circumstances.

On June 7th, John Mauldin published the first of a 6-part series called: Ray Dalio Is Kinda, Sorta, Really Wrong.  There he wrote, “Ray Dalio is really, really wrong” for endorsing MP3. 

On June 24th, Dalio responded in an article in Forbes.

Finally, on July 13th, in the last article in his series, Mauldin advocated the introduction of a Value Added Tax to balance the government’s budget deficit as a better alternative to MP3.

I believe that Ray Dalio is right and that John Mauldin is DANGEROUSLY WRONG. 

Macro Watch will publish a three-video series to explain why.

Bloodletting:

The first video in this series, uploaded today, describes the devastation that balancing the budget through a large Value Added Tax would inflict on the economy.  It would be the economic equivalent of Bloodletting, the medieval medical practice of draining blood from sick people. Our economic system would not survive it.

The next video will discuss why our economic system no longer works the way it did in the past, as Mauldin seems to think it does.  The final video in the series will argue that MP3 is not simply “the least bad option available”, but instead that it represents an extraordinary opportunity that we must exploit to the fullest.

I hope more people will join in and take part in this important debate.  It could shape our future.

This video is 12-minutes long and offers 30 slides which can be downloaded.  Macro Watch subscribers can log in and watch it now.

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