Dalio - "Go Broke"

Dalio is one of the few investors I take seriously and he's been flying red flags for two years.

Now he's offering proactive advice instead of analysis, similar to my proactive Gold Token paper, although Dalio's approach is stabilization instead of a bomb shelter.

His analogy of the Credit Cycle as a blood circulatory system is new to me but similar to my model of an electrical circuit with current flows and capacitance. FreeRepublic has a few caustic comments but I've followed Dalio since 1991 and do not doubt his sincerity and accuracy here. He's offering a solution which would likely work but will be ignored because of...

Tragedy Of The Commons: "A situation where individuals, acting in their own self-interest, deplete a shared resource, ultimately harming everyone involved"

Today's shared resource is the Federal budget and debt. That's how communism failed... the disassociation of outcomes from costs, which seems obvious in the current budget battle. Dalio apparently hopes this situation is salvageable but here's my "Trump/Elon" revelation today:

"Adding a supergenius to your mountain climbing team may raise group IQ but it won't matter much. The other dumbfucks will still find a way to send everybody tumbling down the mountain."

So if you're tethered to 300 million dumbfucks, you need a new climbing team. Only Arkansas, Texas and parts of Utah and Arizona seem to grasp this so far.

People are herd animals and will usually follow the herd off a cliff.

Oh well. I remember an interview of a Japanese trader wiped out in the 1990 Nikkei crash who was asked, "Didn't you know it was a bubble and would crash?"

A: "Yes, all of us knew it was a bubble but we thought somehow it would be different or someone would save us".

The blue States are in a similar denial. You should be selling blue real estate and buying red.