Billionaire Ray Dalio discusses inflation concerns

Billionaire Ray Dalio discusses his concerns over economic inflation, and the steps the U.S. Treasury needs to take to combat it.

Video Transcript

[MUSIC PLAYING]

RAY DALIO: The amount of money and credit that has to be produced and is budgeted is a large increase. And yet, if it's not spent it produces its own problems. The markets have a sensitivity to that. And then there's a supply-demand picture for bonds. The way it works is the Treasury borrows and runs a deficit but it can't produce money. So it has to sell bonds. And when it sells bonds if there are not enough buyers of those bonds, then the Federal Reserve's got to come in and print money and buy those bonds.

And the world right now is over-investing in US dollar-denominated bonds and they have negative real returns. And cash has a lot of negative real returns. So if there was a selling of that and a moving to other assets, that selling worsens the supply-demand [? bound ?] picture. And then if there's not enough demand, that means that the central bank has got to come in and print more money.