Sunday, March 20, 2011

Dalio on market views provides good review of major themes

"Currency devaluations are good for stocks, good for commodities and good for gold. They are not good for bonds." Ray Dalio, Bridgewater in a Barron's Interview
The Barron's Dalio interview focuses on the recurring theme that there are two global economies. There is the emerging markets which have recovered to beyond their pre-crisis levels and the developed world which is stuck in a malaise. The emerging market world is showing continued upward movement with inflation while the developed world is flat. Real rates are still negative in most of the world, so there is no constraint on funding for most businesses.

The dollar is down and stocks and commodities are gaining. Still, we do not have strong job creation.