Ray DalíOh, billionaire investor and founder of bridgewater employees, quoted the legendary economist John Maynard Keynes to express what he thinks about cash as an asset the current economic environment.
“As John Maynard Keynes is credited with saying, “When the facts change, I change my mind.” What are you doing sir?” In that sense, the facts have changed and I’ve changed my mind about cash as an asset: I no longer think cash is trash,” Dalio said in his tweet.
As attributed to John Maynard Keynes, he said: “When the facts change, I change my mind. What are you doing, sir?” In that sense, the facts have changed and I’ve changed my mind about cash as an asset: I no longer think cash is garbage. (1/2)
— Ray Dalio (@RayDalio) October 3, 2022
With interest rates in place and the Fed shrinking the balance sheet, it’s now about neutral – neither a very good nor a very bad deal, he explained, adding short-term interest rates is “about right now”.
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This is a reversal of the previous opinion of the author of Principles. In May 2022, Dalio stated that he didn’t believe in cash. “Of course, cash is still garbage,” he said. “[Do] Do you know how quickly you lose purchasing power?” the investor said said in an interview with CNBC at the World Economic Forum, according to a report by Markets Insider.
Petrol Gas Take: The US Federal Reserve has raised interest rates aggressively this year to counteract inflation. With interest rates higher, short-dated Treasury bill yields are currently trending near 3.9%. At a time when all assets including stocks, commodities, and bonds are coming under pressure, it might not be such a bad idea to hold cash or invest in risk-free Treasury bills.
price action: That iShares Treasury Floating Rate Bond ETF TFLO has gained 0.32% since the beginning of 2022, while the WisdomTree Floating Rate Treasury Fund USFR has gained 0.22% over the same period.
Continue reading: Ray Dalio says Britain is acting ‘like an emerging country’…
