Investors face losses due to the devaluation of the dollar – expert
The U.S. economy is threatened by a significant devaluation of the dollar, because of which investors may incur losses. That was the forecast voiced by Ray Dalio, head of Bridgewater Associates and a billion-dollar investor. The devaluation would be triggered by active fiscal stimulus from the authorities, including a $1.9-trillion stimulus package approved by President Joe Biden and a $2-million investment program to support jobs, he said. In his opinion, these measures would create an excess of money, paving the way for a bubble on the stock market, which is already quite bloated. Increasing labor productivity would prevent the situation from getting any worse. An investor explained that there are two types of bubbles. One is a debt bubble, which bursts when there is a shortage of money to pay debts. The other arises because of an excessive amount of money which leads to its depreciation and consequently to losses for market participants. Now the U.S. economy is threatened by the second type, the investor warns.