Ray Dalio And The Folly Of Claiming Too Much For Oneself
"At the risk of boring you by repeating myself," Ray Dalio began, in the first of what one certainly imagines will be dozens of blog posts in 2022.
I'd lampoon that, but I repeat myself all the time. And at some length. I'm "not into the whole brevity thing," as it were.
Dalio explained that it was worth chancing boredom among his readership because it's a new year, and we're in a new paradigm. The world order is changing, Ray said, on the way to enumerating what he called "the three biggest i
Your Goldman piece about gold and crypto and store of value type buyers is very applicable to this discussion. Ray Dalio can’t seem to wrap his head around the idea that there is no lynch pin. He seems to view the world as a barter system with gold as a constant value and everything else basically pretense. Why should money earned today have the same value as production of the money earned tomorrow?
Means of exchange or store of value, which is more important? For the Uber wealthy such as himself a trifle, a vanity not existential.
I swear some people are looking for a deflationary depression so they could just buy everything up.
Responding to Ray Dalio inspires some of your best writing.
You mentioned ‘cowry shells’! My favorite mention of cowry shells as money was from Neil Stephenson’s Quicksilver books when the ailing Jack Shaftoe decided to buy a billion of them and sail them from Amsterdam to Africa for huge ‘profits’. My favorite sci-fi books I ever took 9 months to read. Now that I mention them, maybe another lap reading them is in order.
H
A cousin who is the closest person I have to a brother and who had a long career at Chase Bank, ending when he was chief counsel at the time of the Morgan merger. At that point he decided to take the severance and find something else to do. He ended up spending 15 years as the head of the country’s oldest pension fund, the one owned by the Presbyterian Church. Through his career he got to know many money managers, including Ray Dalio and Henry Kravis (his best college pal). He used to send me Dalio’s monthly missives from Bridgewater. I read them all faithfully, because he was really rich and he seemed smart. I never read so much crazy talk from anyone as I did reading those notes. I finally quit when he averred that financial markets create actual real (physical) products just like steel companies or auto companies. As you point out here, money is a shared myth, a false god we have created and can discard, something we may be about to do once again. What it is not is part of GDP. It is a metric and a tool, but not a product. Even bitcoin, perhaps one of the new gods for the future, was invented out of thin air. People today want to complain about the dollar as “fiat money.” It is that, but so is every other form of money. It has to be agreed to and believed in, just like Tinkerbell, or it, too, will die.
One thing I’ve noticed about the really rich is that most of them are one, or at most, two-generation holders of great wealth and they really have no idea what to do now that they have all this play money. Most seem to be bored, restless, useless, and directionless. Maybe that’s too hash, but if there were no more $100 mil houses or condos to buy I’m not sure they would know what to do with all that money. I was surprised and saddened the other day when Buffett responded to someone who asked him why he doesn’t spend some of his company’s vast wealth to pay his workers better and his reply was that wasn’t his job. So much for trickle down.
It took me a really long time to understand that morality is the output of our attempt to justify and explain behaviours helpful to the survival of the species. Morality becomes myth when we layer value onto those explanations. Much the same is true for money, an alternate lens through which to view human interactions, and one where we’ve also confused the narrative with the underlying behaviours that it seeks to explain. The differences between these two constructs are more differences of degree than of kind: while morality has evolved only marginally in our lifetimes, we’ve allowed the myth of money to dominate our species’ collective thinking as the developed world has become hopelessly financialized. I don’t always regret that development, I am after all an avid reader of this site, but I still find it refreshing to occasionally be reminded that it is just another story, particularly on days when the screens are flashing red. Thanks, H.