Big cycles' and 'beautiful deleveraging'

Ray Dalio is a successful hedge fund founder with a net worth of about $14 billion as his calling card.

- SANJEEV AHLUWALIA

A YouTuber, his opinions on investments, politics and why things happen are freely available. In a recent episode, an NBC anchor asks whether Donald Trump's tariff war can mitigate MAGA dissatisfaction about jobs and stagnating incomes. His answer is ambivalent—agreeing with the diagnosis of the problem that the demise of manufacturing has enhanced strategic risk and lowered family income, but not with the solution proposed.

Rather than raise tariffs and risk inflation, he would broaden the scope of reform. Reduce the fiscal deficit from 6 per cent to 3 per cent of GDP to manage debt build-up (340 per cent of GDP and growing). To protect business sentiment and enhance economic growth, cut fed interest rates to 3 per cent from 4.25 per cent currently—implicitly agreeing with President Trump that Jerome Powell is wrong. Increase domestic tax revenues by 1 per cent to achieve what he describes as a "beautiful deleveraging".