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Jeff Desjardins — How the Economic Machine Works, According to Ray Dalio

Summary:
Three Major Forces Dalio says this model has guided Bridgewater for over 30 years, and that there are three major forces that shape the economy: 1. Productivity Growth Productivity growth, which is measured as a percentage of GDP, grows over time as knowledge, technology, and innovations help to raise our productivity and living standards. 2. Short-Term Debt Cycle Usually lasting 5-8 years, the short-term debt cycle is a repeating pattern that occurs as credit expands and contracts.3. Long-Term Debt Cycle Usually lasting 75-100 years, the long-term debt cycle usually ends in a period of extreme deleveraging, where global debt is unsustainable and asset prices fall.... Visual CapitalistVideo: How the Economic Machine Works, According to Ray DalioJeff Desjardins

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Three Major Forces
Dalio says this model has guided Bridgewater for over 30 years, and that there are three major forces that shape the economy:
1. Productivity Growth
Productivity growth, which is measured as a percentage of GDP, grows over time as knowledge, technology, and innovations help to raise our productivity and living standards.
2. Short-Term Debt Cycle
Usually lasting 5-8 years, the short-term debt cycle is a repeating pattern that occurs as credit expands and contracts.

3. Long-Term Debt Cycle
Usually lasting 75-100 years, the long-term debt cycle usually ends in a period of extreme deleveraging, where global debt is unsustainable and asset prices fall....
Visual Capitalist
Video: How the Economic Machine Works, According to Ray Dalio
Jeff Desjardins
Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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