Which is right on Trump: Bill Gross or Ray Dalio

Posted by Patrick Ceresna on Nov 16, 2016 11:18:13 AM

Ceresna Comment: Ray Dalio wrote an article reflecting on the Trump Presidency(click to read).  His initial view: Our very preliminary assessment is that on the economic front, the developments are broadly positive—the straws in the wind suggest that many of the people under consideration have a sufficient understanding of how the economic machine works to run reasonable calculations on the implications of their shifts so that they probably won’t recklessly and stupidly drive the economy into a ditch. 
On the other end, Bill Gross has taken a much more concerned view of the situation.  (click to read). His view centers on the idea that the populist movement is only beginning and that Trumps policies do not address the big picture headwinds of demographics, technological displacement, deglobalization and overleveraged balance sheets.  
I have to agree with Bill Gross on this one.  Trump cannot undo the global debt cycle that needs to deleverage. While this may not be immediately bearish, I do feel that the short-term optimism will have a reality check as soon as all the dumb money finishes its panic buying. 

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Topics: Trump, populism

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