American billionaire, founder of the Bridgewater Associates Ray Dalio Headder called Ray Dalio called the threat to investors. He warned that the increase in the cost of their portfolio may not bring them income due to inflation and high prices, reports Bloomberg.
According to Ray Dalio, growing inflation in the United States, which reached the maximum value since 1990, is a threat to income. “Some people make a mistake, thinking that they become richer, because they see how their assets are growing in price. But they do not see how their purchasing power decreases,” Dalio said. He noted that the most suffering those who hold cash.
Billionaire also noted that at the moment the United States spends much more than earning. Therefore, they are trying to cover their expenses in that they are printed by money that depreciates. This path the founder of the hedge fund called false for the country. But indicated that real incomes (money remaining after mandatory payments adjusted for inflation) are for the state economy by production capacity. “Printing money and their distribution will not make us richer if money is not directed to improving productivity. When a lot of money and loans are issued, they fall in price, so the presence of more money may not guarantee the growth of income and purchasing power,” Dalio explained.
The rise in prices in the United States has already broken the record and became the maximum since 1990. Consumer prices in the country in the annual expression at the end of October have increased dramatically – up to 6.2 percent from 5.4 percent a month earlier, also the consumer price index rose by 0.9 percent compared with September, which became the biggest jump in four months. Moreover, both indicators turned out to be higher than the forecasts of analysts who expected annual inflation at the level of 5.8 percent and 0.6 percent in October. This contributed to high energy prices, housing, food and vehicles. At the same time, pessimism manifested itself at the US small business. Confidence in the future of American companies reached a minimum. Entrepreneurs explained that all the fault of the growing costs of production and wages, because of which they lose profits.