Bridgewater Associates’ Ray Dalio, founder of the world’s largest hedge fund, said investors would be “crazy” to hold government bonds now because of money printing by central banks to rescue the global economy.
“This period, like the 1930-45 period, is a period in which I think you’d be pretty crazy to hold bonds,” Mr. Dalio said Wednesday.
“If you are holding a bond that gives you no interest rate, or a negative interest rate, and they are producing a lot of currency and you’re going to receive that, why would you hold that bond?”
Mr. Dalio may not like bonds as an investment, but he said he believes central bankers have to employ every bit of monetary ammunition they can muster to compensate for the collapse in income and spending resulting from the coronavirus pandemic.
While economists are divided on how long and deep the recession will be, Mr. Dalio thinks about it differently: as a $20-T “hole” that needs to be filled.
Gold, along with some stocks and corporate bonds of companies with strong balance sheets are the assets that will rise in the current environment, he said.
Have a healthy day, Keep the Faith!