The founder and chief investment officer of Bridgewater Associates, the world’s largest hedge fund company, has warned that the government will “impose restrictions on capital movements” in assets such as Bitcoin. He added that regulators could also impose tax changes that “could be more shocking than expected.”
Ray Dalio warns of government sanctions and taxes
Ray Dalio, founder and chief investment officer of Bridgewater Associates, wrote a post on LinkedIn last week: “Why in the world when you own bonds”
He noted that bond markets currently offer “ridiculously low yields” that “do not meet the funding needs of these asset holders.” The executive wrote that “US debt assets of various maturities now have trillion trillion dollars,” adding that their holders would at some point seek to sell them for cash to buy goods and services.
However, Bridgewater’s chief investment officer estimates that “at the current valuation, there is a lot of money in this financial asset. The real expectation is that any significant percentage of the bond money can be converted into cash and exchanged for goods and services.” It will have to cover a lot of money by printing and devaluing it and in general through a lot of debt and government financial restructuring, including a big tax increase. “
Dalio explained: “Based on how things have historically worked and what is happening now, I believe that tax changes will also play an important role in driving capital flows across different investment assets and different locations, and that movements will influence market movements. ”
The billionaire fund manager insisted that “if history and logic become guidelines, policymakers who are short of money will raise taxes and not like this capital movement outside of debt assets and other storeholds of wealth and other tax domains.”
They can impose very good restrictions against other assets (e.g., gold, bitcoin, etc.) and capital movements in other places. These tax changes could be more shocking than expected.
The founder of Bridgewater Associates cited Elizabeth Warren’s proposed property tax, for example, as “unprecedented in size.” “At other times, citing their study of property taxes in other countries, they expect that the proposal” will largely lead to more capital inflows and other moves to get rid of this tax. ”
As a result, “the United States is considered a place of hospitality for capitalists and capitalists. In conclusion, the bridgewater executive warned:
One should be aware of the possibility of tax changes and capital controls.
Dalio has been studying bitcoin in recent months. In November last year, he admitted that he might be wrong about Bitcoin, but nonetheless governments were concerned about making cryptocurrency illegal. In December, he said Bitcoin “could serve as such a storehold of custom and other assets in gold.” Then, in January of this year, he said that “Bitcoin is a hell of a discovery,” indicating that his pay firm is looking closely at cryptocurrencies.
What do you think of Ray Dalio’s warning? Let us know in the comments section below.
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