Why Ray Dalio says SVB collapse is a ‘canary in the coal mine’

MarketWatch/William Watts/3-15-2023

graphic image of hand holding pin about to prick balloon“Dalio argued that SVB’s failure was a ‘very classic event’ in what he termed the ‘very classic bubble-bursting part of the short-term debt cycle.’ That phase occurs when tight money aimed at curtailing credit growth and inflation leads to a ‘self-reinforcing’ contraction in debt and credit. That means a ‘contagion process’ that sees dominoes fall until central banks relent and create ‘easy money,’ which then sets the stage for the next big debt problem.”

USAGOLD note: A view similar to that of Blackrock’s Larry Fink featured below – two of Wall Street’s top money managers forecasting the same future. Dalio is a long-time advocate of gold ownership.

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