"Cash is Trash" but Bitcoin is Too Volatile According to Ray Dalio Jonathan Ganor 2020-01-27 10:11:21 993 views

Dalio Says Facebook's Libra Could be Preferable to Bitcoin

Recently on CNBC's Squawk Box panel in Davos Switzerland, Ray Dalio was featured to give his opinion on economics and investments. Dalio is an American billionaire investor and the founder of Bridgewater Associates, a hedge fund that has existed since 1975.

In the segment, Dalio shared many wealth management tips and personal recommendations. He started off by advising for a global and well diversified portfolio. Dalio's recommended gold and warned against cash as an investment.

"Cash is trash," Dalio said. "Get out of cash. There's still a lot of money in cash."

Dalio mentioned inflation with fiat monetary systems he claimed "First we had gold coins which had intrinsic value. Then we thought up of the idea of banks and central banks and what they do is create certificates we call notes that are claims on those notes. Then we print many more certificates than there is money in the bank. That is called the link system. We broke that in 1971".

"Then you have a fiat monetary system, which means you can print whatever amount of money you want and that's what governments do."

Dalio on Bitcoin & Libra

Later one of the panelists shifted the discussion to Bitcoin. While Dalio endorsed gold as an investment he claimed that Bitcoin was too volatile. "Libra which should have more stable value could have more potential than Bitcoin," he remarked. Dalio later said, "There's two purposes of money, a medium of exchange and a store hold of wealth, and Bitcoin is not effective in either of those cases now".

"We're going to have larger deficits which we're going to print money for," Dalio said. "At a point in the future, we still are going to think about what's a store holder of wealth. Because when you get negative-yielding bonds or something, we are approaching a limit that will be a paradigm shift."

It seems that Dalio's view echoes that of other Bitcoin sceptic economists such as Peter Schiff to a certain degree. Both advocate for gold as an investment and have gripes with the over-inflated stock markets to a certain degree and fiat currency. Both also seem to underestimate Bitcoin's potential in the long run as well.

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