Ray Dalio does the math

Bloomberg/Ye Xie/9-14-2022

illustration of the inflation iceberg“A mere increase in rates to about 4.5% would lead to a plunge of around 20% in equity prices based on the present value discount effect, [Dalio] said. On top of that he estimates a 10% negative impact from declining incomes.”

USAGOLD note: Dalio also thinks the markets are “too complacent about long-term inflation.” Few have considered the economic impact of dropping incomes combined with stubborn inflation.

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