Thursday, September 26, 2013

Ray Dalio explains how the economic machine works

In this simple, easy to understand illustration by hedge fund manager Ray Dalio, the economic and debt cycles are explained in layman's terms, so that even those just beginning to learn economics can understand how the economy works in a nutshell. One especially important distinction Mr. Dalio makes is the difference between money and credit, and how most of our "money" is actually credit (debt), even though it is referred to as money, as if it were currency. This is a point I have been hammering over and over, and well illustrated by Ray Dalio. Enjoy.

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