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Don't Make the Mistake of Thinking That What's Now Happening is Mostly About Tariffs At this moment, a huge amount of attention is being justifiably paid to the announced tariffs and their very big impacts on markets and economies while very little attention is being paid to the

It is with great pain that I am sharing with you that my 42 year old son was killed in a car crash yesterday. My family and I are mourning and processing and would prefer to be incommunicado for the time being.

Now that the budget bill has passed Congress, we can see what the projections look like for deficits, government debt, and debt service expenses. In brief, the bill is expected to lead to spending of about $7 trillion a year with inflows of about $5 trillion a year, so the debt, which is now about 6x of the money taken in, 100 percent of GDP, and about $230,000 per American family, will rise over ten years to about 7.5x the money taken in, 130 percent of GDP, and $425,000 per family. That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments), which will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases, or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels. This printing and devaluing is not good for those holding bonds as a storehold of wealth, and what’s bad for bonds and US credit markets is bad for everyone because the US Treasury market is the backbone of all capital markets, which are the backbones of our economic and social conditions. Unless this path is soon rectified to bring the budget deficit from roughly 7% of GDP to about 3% by making adjustments to spending, taxes, and interest rates, big, painful disruptions will likely occur.

The Effects of Tariffs: How the Machine Works Tariffs are taxes that: 1) raise revenue for the country imposing them that both the foreign producers and the domestic consumers pay (how much paid by each depends on their relative elasticities),

"I promise to not raise your taxes" and "I promise to not cut your benefits" are the two popular political promises that are inconsistent with the much more needed promise "I promise to cut the budget deficit to about 3 percent of GDP" that is required to prevent a big debt/dollar crisis. There is no way that the deficit/debt bomb problem can be sustainably dealt with unless there is a mix of tax revenue increases and spending decreases that are determined in a bipartisan way. Our representatives in Washington, DC, both Republicans and Democrats, know this is true. They understand the need to reduce the deficit by having those from both sides chip in a bit (e.g., a 4 percent increase in tax revenue and a 4 percent spending cut) which would lead to a supply/demand balance improvement for US debt which in turn would lower interest rates. Lower interest rates would help reduce the budget deficit as well as help the markets and the economy. But because politics have become so absolutist, they feel they can't go down this obviously best path because both their constituents and their parties will throw them out of office if they explored this more balanced approach. To me, that’s a tragedy.

It's Too Late: The Changes Are Coming Some people believe that the tariff disruptions will settle down as more negotiations happen and greater thought is given to how to structure them to work in a sensible way.  However, I am now hearing

History shows us that when great empires fall, they generally fall for similar reasons. (1/3)

What’s Coming: The Changing Domestic and World Orders Under the Trump Administration What’s Coming: The Changing Domestic and World Orders Under the Trump Administration Now that the nightmare scenario of a close Trump loss and ensuing fight over the election has been taken off the

Today is a very special day for me and Bridgewater Associates because I transitioned my control of Bridgewater to the next generation and I feel great about the people and "machine" now in control. This transition moment is the culmination of a 47-year journey (1/11)

I am pleased to be able to help PM Modi as he is a man whose time has come when India’s time has also come. He and India are in an analogous position to Deng Xiaoping and China in the early 1980s--i.e., at the brink of the fastest growth rates and biggest transformations in the world. Additionally, the challenges both between and within China and the US are putting PM Modi in a unique position to influence the complexion of the world order via influencing the non-aligned world 's dealings with these two leading world powers. I believe that Modi has what it takes to have the greatest impact on the largest number of people in the world at a time that the risks of harmful impact are greater than at any time in our lifetimes.

India's successful lunar mission (landing its Chandrayaan-3 spacecraft on the moon) is another one of many straws in the wind showing its ascendence. As previously shown in my health index for countries, which is used to derive my projections for countries' next 10-year growth rates, India scores on top with a projected growth rate over the next 10 years of about 7%. It has the right mix of ingredients that shows that it has great potential and the right leadership to catalyze it. It reminds me a lot of China in 1984 (when I first went) around the time Deng Xiaoping made his reform and opening up policies that catalyzed China. Congratulations India!

It is with great pain that I am sharing with you that my 42 year old son was killed in a car crash yesterday. My family and I are mourning and processing and would prefer to be incommunicado for the time being.

Ask me anything. I really value our interactions on social media which have changed a lot over time. It’s been a while since I’ve done an AMA so I thought I’d do one with this post. Ask me anything in the replies and I will answer as many as I can in the coming days.

Now that the budget bill has passed Congress, we can see what the projections look like for deficits, government debt, and debt service expenses. In brief, the bill is expected to lead to spending of about $7 trillion a year with inflows of about $5 trillion a year, so the debt, which is now about 6x of the money taken in, 100 percent of GDP, and about $230,000 per American family, will rise over ten years to about 7.5x the money taken in, 130 percent of GDP, and $425,000 per family. That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments), which will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases, or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels. This printing and devaluing is not good for those holding bonds as a storehold of wealth, and what’s bad for bonds and US credit markets is bad for everyone because the US Treasury market is the backbone of all capital markets, which are the backbones of our economic and social conditions. Unless this path is soon rectified to bring the budget deficit from roughly 7% of GDP to about 3% by making adjustments to spending, taxes, and interest rates, big, painful disruptions will likely occur.

Don't Make the Mistake of Thinking That What's Now Happening is Mostly About Tariffs At this moment, a huge amount of attention is being justifiably paid to the announced tariffs and their very big impacts on markets and economies while very little attention is being paid to the

"I promise to not raise your taxes" and "I promise to not cut your benefits" are the two popular political promises that are inconsistent with the much more needed promise "I promise to cut the budget deficit to about 3 percent of GDP" that is required to prevent a big debt/dollar crisis. There is no way that the deficit/debt bomb problem can be sustainably dealt with unless there is a mix of tax revenue increases and spending decreases that are determined in a bipartisan way. Our representatives in Washington, DC, both Republicans and Democrats, know this is true. They understand the need to reduce the deficit by having those from both sides chip in a bit (e.g., a 4 percent increase in tax revenue and a 4 percent spending cut) which would lead to a supply/demand balance improvement for US debt which in turn would lower interest rates. Lower interest rates would help reduce the budget deficit as well as help the markets and the economy. But because politics have become so absolutist, they feel they can't go down this obviously best path because both their constituents and their parties will throw them out of office if they explored this more balanced approach. To me, that’s a tragedy.

After spending time in Washington, DC discussing the budget deficit with senior people on both sides of the aisle, it’s clear to me that we are unlikely to change the debt trajectory we’re on and avoid the painful consequences. While virtually everyone agrees on the need to address our debt problem in a balanced way that includes tax increases and cuts to benefits, they also agree that they cannot speak up because politics have become absolutist. We must find a solution around absolutist pledges like, ”I will not raise taxes,” or “I will not reduce benefits,” when they are desperately needed.

While Bitcoin gets a lot of attention, it hasn’t played the safe-haven role many expected. In my view, there are a few reasons why. First, Bitcoin lacks privacy. Transactions can be monitored and potentially controlled, which is why central banks aren’t looking to hold it. Second, it also has a high correlation with tech stocks. When investors get squeezed in other areas of their portfolio, they sell their Bitcoin to cover it. Third, it’s a relatively small and controllable market, whereas gold stands alone. There is only one gold. Ultimately, gold is more widely held, deeply established, and still plays a central role in the global system.

It's Too Late: The Changes Are Coming Some people believe that the tariff disruptions will settle down as more negotiations happen and greater thought is given to how to structure them to work in a sensible way.  However, I am now hearing

I probably would have fired the head of the Bureau of Labor Statistics too. That's because its process for making estimates is obviously obsolete and error-prone, and there is no good plan in the works for fixing it. The huge revisions in Friday’s employment numbers are symptomatic of this, especially because the revisions brought the numbers toward private estimates that were in fact much better. I assure you that this is something that I know a lot about because of how I use data to follow the economy and bet on where it's going. Of course, if the way most people in the media are in conveying President Trump’s motivation for the firing is correct —such as The New York Times saying "When President Trump didn’t like the weak jobs numbers that were released on Friday, he fired the person responsible for producing them"—that would be a big problem because leaders manipulating numbers that distort the truth to suit their political objectives is a classic sign of the loss of a functioning system with rule of law and checks and balance, and the loss of these things leads to the loss of confidence that underpins our whole economic and political system. So, it would be good if President Trump made his thinking clear. In any case, we do need big renovations to the ways the government estimates what's going on in the economy to make them more, not less, accurate.

While I have been explaining for some time my thinking about gold (I like it) and debt assets (I don't like them) as storeholds of wealth in the context of how the world order is changing, now that gold is hotter than AI stocks (and the meme is now changing to recognize that it can be an even better storehold of wealth than tech stocks), I'm getting lots of questions about it. If you have questions for me, please ask them in the comments and I'll do my best to answer them here.  I'm using the questions I get and my answers to them to educate my AI clone, so it's helpful to know what questions people have.

The Effects of Tariffs: How the Machine Works Tariffs are taxes that: 1) raise revenue for the country imposing them that both the foreign producers and the domestic consumers pay (how much paid by each depends on their relative elasticities),