Debt magic is dead: mean-reversion overdue

The revelation is spreading that monetary policy is exhausted and asset prices are garish against today’s falling growth backdrop. Dalio and Spitznagel’s comments in the below clips are refreshing admissions to hear in mainstream media.  (Geithner in the first clip is his usual conflicted, self-serving, hypocritical best, you can listen or skip his two cents as always).

At the Delivering Alpha Conference, Ray Dalio, Bridgewater Associates Founder, and Tim Geithner, Former Treasury Secretary, speak to CNBC’s Andrew Ross Sorkin about growth in the U.S. and global economy. Here is a direct video link.

Mark Spitznagel, Universa Investments CIO, discusses how central banks are the “root of all evil.” Here is a direct video link.

So much for modern portfolio theory’s ‘genius’ about asset diversification providing smoother, more constant returns: all assets went up on monetary madness, so all assets–bonds, real estate, equities and commodities–are now egregiously inflated and falling in unison at the end of our generation’s debt super cycle.

The Canadian loonie bounced hard on hope in January, but may be heading south again for the winter, as shown here.


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