Cartoon video youtube
Already, more than 300,000 people have viewed the video since it went up last month. Dalio’s effort is attracting attention with both students of economics and the financial cognoscenti. Because spending is cut -Īnd one man’s spending is another man’s income - it causes incomes to fall.” This is how he explains austerity: “When borrowers stop taking on new debts, and start paying down old debts, you might expect the debt burden to decrease. In doing so you create a time in the future that you need to spend less than you make in order to pay it back.” “Think of borrowing as simply a way of pulling spending forward,” he says, explaining that to buy something you can’t afford today, “you essentially need to borrow from your future self. In his video, titled “How the Economic Machine Works,” that even the most sophisticated investors will appreciate. There are refreshingly basic explanations for neophytes Dalio’s approach may be a more practical way to think about the economic cause-and-effect relationships. Just as there is monetarism and Keynesianism, Mr. It is one of the reasons he, and others, believe that the Federal Reserve and many other institutions missed the signs of the financial crisis. Dalio says he believes that the traditional approach to economics is too academic and impractical. He explained that, “I believe that most influential decision makers and most people cause a lot of needless economic suffering because they are missing the fundamentals.”Īn image from the animated cartoon “How the Economic Machine Works.” Credit “While I kept it confidential until recently, I now want to share it because I believe that it could be very helpful in reducing big economic blunders, if it was more broadly understood,” he wrote in anĮ-mail. He decided to make the video to demystify economic cycles because he believes most investors, regulators and politicians are focused on the wrong issues. It also may seem counterintuitive that a money manager who sells his clients on his foresight would want to preach to the masses.
The average Main Street investor has probably never heard of him. In school, and instead explains the economy as if it were a “machine” that he believes is much easier to understand and predict. He dispenses with the way economists have long taught economics Dalio’s plain-spoken 30-minute video is an oddly entertaining animated cartoon filled with provocative theories about the way the economy runs.