♪ [APPLAUSE] DAVID:
OK, HERE WE ARE WITH RAY DALIO, ONE AND ONLY. RAY: HI, DAVID. DAVID: HAPPY TO HAVE YOU. THE FOUNDER OF BRIDGEWATER AND
THE AUTHOR OF BOOKS, BUT IS ALSO STARTING SOMETHING WITH
MASTER CLASS, AS THE LEADING NUMBER ONE LUMINARY INVESTOR.
WE HAVE READ YOUR MATERIAL AND HAVE SOME SENSE OF HOW YOU
STRUCTURE, PARTICULARLY IN YOUR MOST RECENT BOOK.
YOU HAVE FIVE BASIC FORCES AND GO BACK SEVERAL YEARS TO LOOK
AT THEM. I THOUGHT WE MIGHT TAKE SOME OF
THOSE FORCES AND APPLY THEM TO THE PRESENT DAY.
THE FIRST ONE HAS TO DO WITH MONEY, CREDIT, AND DEBT, THE
ECONOMY, AND THEN INTERNAL CONFLICTS WITHIN A COUNTRY,
EXTERNAL, FORCES OF NATURE, WHICH WOULD BE LIKE CLIMATE
CRISIS. START WITH THE ONE THAT INVOLVES DEBT, CREDIT, MONEY,
AND THE ECONOMY, AND APPLY IT TO THE HERE AND NOW.
OUR LONG-TERM INTEREST RATES, AND FOR THIS PEOPLE -- FOR THIS PURPOSE I SAY
LONG-TERM, DO YOU THINK THEY WILL COME BACK DOWN?
THERE ARE CAMPS IN BOTH DIRECTIONS AT THIS POINT SEND
YOU LOOK AT THE LONG-TERM. RAY: IT'S IMPORTANT TO ME TO NOT
JUST ANSWER QUESTIONS LIKE HIGHER OR LOWER, BUT EXPLAIN
THE MECHANICS OF TECH RELATIONSHIPS GOING ON.
THE REASON I DID THIS STUDY, WHICH TURNED TO A BOOK -- I AM
A PRACTICAL MARKET DECISION-MAKER, THREE BIG
THINGS HAPPENED OR ARE HAPPENING IN OUR LIFETIMES THAT
NEVER HAPPENED BEFORE. LET ME SAY THAT AGAIN -- THREE
THINGS THAT SURPRISE US THAT HAVEN'T HAPPENED IN OUR
LIFETIMES, BUT HAPPENED MANY TIMES THROUGH HISTORY ARE THE
CREATION OF AN ENORMOUS AMOUNT OF DEBT AND THE MONETIZATION.
THE SECOND IS THE INTERNAL CONFLICT, THE LARGE WEALTH GAPS
THAT MAKE THE POLITICS OF POPULISM, SO ON. THE THIRD IS THE BRIGHT --
GREAT POWER CONFLICT AND THE POSSIBILITIES OF WAR.
ASK YOUR QUESTION IN TERMS OF THE MECHANICS, THERE ARE VERY
BASIC, SIMPLE THINGS. THERE IS A DEBT CYCLE.
SHORTEN DEBT CYCLES -- WE ARE USED TO THOSE, LAST ON AVERAGE
ABOUT SEVEN YEARS, GIVE OR TAKE, OR THREE. YOU HAVE INTEREST RATES AND THE
FEDERAL RESERVE BECOMES STIMULATIVE, THEN YOU HAVE
GROWTH, NON-INFLATIONARY GROWTH, THE TIGHT MONETARY POLICY, AND THE SLOW UP SESSION
THAT FOLLOWS AS THE CYCLE PARTICIPATES.
WE HAVE HAD 12 OF THOSE. WE ARE IN 13TH.
WE ARE HALFWAY THROUGH THAT CYCLE AND ARE AT THE POINT
WHERE INTEREST RATES HAVE TO RISE. OK.
THE LEVEL OF INTEREST RATES -- YOU HAVE TO SATISFY A DEBTOR
AND A CREDITOR. INTEREST RATES HAVE TO BE HIGH
ENOUGH THAT THE CREDITOR GETS A REAL RETURN, HIGHER THAN THEIR
MONEY. IF YOU DON'T DO THAT, YOU CREATE THE CYCLE THAT WE HAD
BEFORE, WHERE MONEY IS ESSENTIALLY FREE, INTEREST
RATES ARE NIL, IN SOME CASES NEGATIVE, AND YOU HAVE A
SITUATION WHERE YOU DON'T HAVE TO PAY PRINCIPAL, SO THE MONEY
IS ESSENTIALLY FREE. THE IMBALANCES IS MADE MORE
ENORMOUS BY THE SUPPLY BEING INADEQUATE.
THERE IS NOT ENOUGH MONEY TO BUY THOSE BONDS.
SO THE FEDERAL RESERVE HAS TO PRINT MONEY, BY THOSE BONDS,
AND READ IS TO YOU -- REDISTRIBUTE WEALTH. WE HAVE MOVED TO A NEW LEVEL OF
INTEREST RATES DUE TO INFLATION, WHETHER YOU
CALCULATE THAT BY LOOKING AT TIPS OR INTEREST RATES.
I NEED A 1% TO A ONE POINT 5% REAL RATE.
THE DATES WE HAVE SEEN IN THE PAST ARE OVER AND THERE ARE BIG
ADJUSTMENTS. THE HEADLINE FOR THAT IS, WHO
HAVE BEEN LOSERS? WHO HAVE BEEN WINNERS AND WHO
HAVE BEEN LOSERS? IN THAT, IN ORDER TO CREATE
THIS BIG TRANSFER OF WEALTH THAT THEY NEEDED TO HAVE IN
VARIOUS WAYS, THE GOVERNMENT BORROWED A LOT OF MONEY,
BECAUSE THEY SPENT A LOT MORE THAN THEY EARNED, AND RELEASED
A LOT OF BONDS. THE FEDERAL RESERVE SUBSIDIZES
THOSE BONDS, SO THE BIG LOSERS OF THOSE CYCLES HAS NOT BEEN
THE INDIVIDUAL BALANCE SHEETS, BECAUSE THOSE HAVE BEEN
IMPROVED . THOSE ARE HOLDING GOVERNMENT
DEBT AND THE ONES HAVING THE LOSSES.
THE CENTRAL BANKS HAVE LOST A LOT OF MONEY, THE COMMERCIAL
STAGE -- THE COMMERCIAL BANKS HAVE LOST A LOT OF MONEY.
THE COMMERCIAL BANKING PROBLEM IS LARGELY A GOVERNMENT THAT
PROBLEM, BECAUSE THERE WAS THE PROBLEM OF HOLDING BONDS WITH
SHORT-TERM INTEREST RATES, SO THAT WAS SQUEEZE. AS WE MOVE FORWARD, THE HIGHER
YOU RAISE THE DEBT TO INCOME RATIO, THE MORE DIFFICULT THAT
BALANCING ACTS BECOMES. WE ARE SEEING A TRADE-OFF THAT
INTEREST RATES HAVE TO BE ENOUGH CREDIT -- FURTHER
CREDITOR, BUT NOT FOR THE DEBTOR. YOU HAVE A 1% DISH GROWTH RATE
-- SO YOU ARE SEEING GROWTH COME DOWN AND THERE IS STILL AN
INFLATION ISSUE. THE INFLATION ISSUE COMES FROM
TWO PARTS. FIRST, IF YOU SPEND WHAT YOU
OWE, AND SECOND, IF IT COMES FROM THE SUPPLY AND DEMAND. THIS ISN'T A CLASSIC RECESSION
IN WHICH THE UNEMPLOYMENT RATE GOES OF CAUSE THERE IS WEALTH
TRANSFER, AND THEY ALSO HAVE HIGHER WAGE GAUGES.
THEN YOU HAVE THE INEFFICIENCY OF THE GLOBAL SUPPLY CHAINS,
WHICH HAPPENS THERE. WHAT THAT MEANS, I THE YOU HAVE
THE STUBBORNLY HIGH INFLATION AND THE REAL INSURER ERRING
HIGH AND THAT -- REMAINING HIGH AND THAT. DAVID: THERE ARE TOO MUCH SAVINGS
GLOBALLY, BUT AT THE SAME TIME, REDUCTION IN PRODUCTIVITY, LESS
DEMAND COMING ONLINE -- SOME PEOPLE ARGUE THAT WE WILL HAVE
INFLATION COME BACK DOWN ON ITS OWN AND PHENOMENAL RATES, IF
YOU ADD THEM ON TOP OF THOSE, THEY WILL COME DOWN.
DO YOU DISAGREE WITH THAT? RAY: YES. IT'S A MATTER OF THE AMOUNTS OF
LABOR CREATED AND CREDIT, THE NEXT IS --.
WE KNOW THE PROJECTIONS AND INDIVIDUALS.
THE BIGGEST RISK IS A SUPPLY-DEMAND RISK. WE WILL SELL A LOT OF BONDS,
AND THEN THE QUESTION IS THE FEDERAL RESERVE PRINTING THAT.
SO THE EMPLOYMENT AND THE AMOUNT OF RANGE, WE HAVE THE
POWER. WE ARE ALSO LIVING IN A DIFFERENT WORLD AS SUPPLY
CHAINS CHANGE. THE ONLY BIG QUESTION IS THE
TECHNOLOGY IMPACTS. IF WE ARE TAKING A FIVE-YEAR
WILL HAVE ON THAT. THE DEMOGRAPHICS ARE NOT A
FAVORABLE THING, BECAUSE WE HAVE TO DRAWDOWN SAVINGS AND
THERE WILL BE A LESSER NUMBER OF POPULATION.
IN TERMS OF THE LABOR COMPONENTS, I DON'T SEE THAT AS
A NET POSITIVE. DAVID: GOING OUT, YOU MENTIONED WE WOULD BE BORROWING IN OR AROUND
WHAT WE OWE. ARE WE IN A DEBT CRISIS OR
HEADED FOR ONE? RAY: IN MY OPINION, WE ARE IN THE
BEGIN UNION -- THE BEGINNING OF A VERY CLASSIC LATE CYCLE DEBT
CRISIS WHEN THE SUPPLY-DEMAND GAP, WHEN YOU ARE PRODUCING TOO
MUCH DEBT AND HAVE A SHORTAGE OF BUYERS, WHAT'S HAPPENING NOW
AS WE HAVE TO SELL ALL THIS, DO YOU HAVE ENOUGH BUYERS? THERE ARE ZHE ZENG IN TERMS OF
-- THERE ARE MANY THINGS IN TERMS OF THAT THAT HAVE A
GEOPOLITICAL EFFECT. SOME COUNTRIES ARE WORRIED
ABOUT SANCTIONS, AND THEN THERE IS THE GEOPOLITICAL SHIFT.
SOME MIGHT LOOK AT THE SUPPLY-DEMAND ISSUE, THIS
IMPLY-DEMAND ISSUES FOR THAT DECK.
IT HAS TO BE BOUGHT AND HAVE A HIGH-END OF INTEREST RATE.
CRISIS, IF WE CONTINUE DOWN THIS PATH AND TURN WHAT LOOKS
LIKELY IN THE NEXT FIVE TO 10 YEARS, YOU WILL REACH THE POINT
WHERE THAT BALANCING BACK -- BALANCING ACT BECOMES DIFFICULT.
DAVID: THERE IS THERE ANY EVIDENCE OF
THAT SO FAR? RAY: WE ARE AT THE BRINK OF FINDING
THAT OUT. THE AMOUNT OF GOVERNMENT DEBT
COLLAPSE. WE DID NOT ISSUE GOVERNMENT
DEBT. NOW WE WILL ISSUE A LOT OF GOVERNMENT DEBT.
WHEN ONE LOOKS AT THE BUYERS, THERE APPEARS TO BE A
SIGNIFICANT STORAGE FOR GOVERNMENT DEBT. NOW WE CAN SEE WITH THAT
PICTURE LOOKS LIKE AS WE GO OVER YEAR AND TWO.
DOES YOUR ONE AND TWO. -- YEAR ONE AND TWO. RAY: THE THINGS YOU SEE THAT -- SEE
HAPPEN WHEN YOU LOOK AT HISTORY, YOU HAVE A FINANCIALLY
NOT GOOD SITUATION AT THE SAME TIME AS YOU HAVE LARGE WEALTH
GAPS. YOU START TO SEE THE EMERGENCE
OF POPULISM, AND WE SEE EXTREMISM IN BOTH OF THE
POLITICAL PARTIES. WE HAVE HAD THAT SPLIT. A POPULIST PERSON WILL WIN AT
ALL COSTS AND THE RULES OF THE GAME DO NOT MUCH MATTER. THE JANUARY 6 STUNT AND SO ON WAS VERY INTERESTING, BUT THE
POLITICAL SIDE TENDS TO CREATE THAT
POLARITY. I THINK IT'S CLEAR THAT THERE IS ONLY ONE GOOD OUT COME, AND
THAT'S A STRONG, BIPARTISAN MIDDLE.
EITHER OF THE EXTREMES WILL NOT BE ABLE TO BE DOMINANT
, THE SMALL RIGHT OR THE SALT -- SMALL LOANS. BUT WE ARE SEEING A GEO
FRAGMENTATION, NOT BECAUSE OF TAXES, BUT A DIFFERENCE IN
VALUES AND SO ON. YOU ARE SEEING A SEPARATION.
OVER THE NEXT TWO YEARS, THE REAL QUESTION IS, CAN WE
MAINTAIN OR HAVE A STRONG, BIPARTISAN MIDDLE, OR ARE YOU
GOING TO HAVE MORE OF THAT FRAGMENTATION?
TWO THINGS THAT ARE ALIGNING THAT ARE CONCERNING?
ON THE SHORT YEAR CYCLE, IS IN YOUR DANCE I WILL -- ON THE
SHORT YEARS CYCLE IN YOUR INTEREST RATE CYCLE, THE
CONSEQUENT IS WILL BE A WEAKER ECONOMY GOING FORWARD. IT DOES NOT HAVE TO BE A BIG
DOWNTURN, BUT IT IS A BALANCE SHEET RECESSION.
I THINK THINGS ARE GOING TO GET WORSE IN THE ECONOMY, THERE IS
A FINANCIAL ISSUE AT THE SAME TIME AS YOU HAVE THIS INTERNAL
CONFLICT. I THINK THAT WILL MAKE FOR A
RISKY SITUATION, PARTICULARLY WHEN WE DEAL WITH A THIRD MAJOR
THING, THIS GEOPOLITICAL CONFLICT IN THE WORLD,
PARTICULARLY RELATED TO CHINA, RUSSIA, AND THE IMPLICATIONS
THAT HAS ON SUPPLY CHAINS, PRODUCTION AND THE LIKE. DAVID:
YOU KNOW CHINA VERY WELL, YOU HAVE INVESTED IN IT OVER THE
YEARS, BUT WHAT DO YOU MAKE OF THE SITUATION WITH THE U.S.
AND CHINA? YOU HAVE SAID YOU THINK WE ARE
HEADING IN A BAD DIRECTION RIGHT NOW. RAY: RIGHT NOW, THERE ARE
IRRECONCILABLE DIFFERENCES ON A NUMBER OF TOPICS.
TAIWAN, RUSSIA, REVERSE IF HE IS CHIPS -- REVERSE IF
IS CHIPS, AND THERE'S QUITE A BIT OF BRINKSMANSHIP.
WE ARE HEADING INTO A POLITICAL YEAR HERE WHERE THERE WILL BE
MORE PRESSURE. BOTH SIDES ARE VERY WORRIED
ABOUT THIS. I THINK YOU ARE GOING TO SEE
RESTRAINT -- I DON'T THINK IT'S GOING TO LEAD TO A TERRIBLE
SITUATION IN TERMS OF -- BUT IT IS LEADING, YOU WILL SEE
RESTRAINT IN A PERIOD OF TIME WHERE YOU WILL SEE MORE
TENSIONS. THERE IS A COMMISSION AND SO
ON, MORE PRESSURE WITH CHIPS, THAT'S NOT GOING TO CROSS THE
LINE BUT RAISE TENSIONS. YOU WILL ALSO SEE MORE ATTEMPTS
-- TONY BLINKEN IS GOING OVER, MORE ATTEMPTS TO TRY TO SMOOTH
THINGS OUT, BECAUSE BOTH SIDES ARE AFRAID OF WHERE WE ARE. WHILE IT WILL BE THAT
BRINKSMANSHIP, AND MOST LIKELY IT WILL BE BUILDING THAT
SELF-SUFFICIENCY. EFFICIENCY WAS THE GAME BEFORE
-- EVERYTHING WAS SUPER GLOBAL, YOU PRODUCE IT IN THE MOST
CONVENIENT PLACE, AND WE BECAME VERY INTERTWINED WITH EACH
OTHER. NOW THERE IS THE WORRY ABOUT
BEING CUT OFF OF ALL SORTS OF THINGS. SO YOU HAVE THAT DYNAMIC
PLAYING A NEGATIVE ROLE IN ECONOMICS AND INFLATION. DAVID:
THINKING ABOUT THE U.S. RELATIONSHIP WITH CHINA, WHICH IS THE MOST IMPORTANT
GEOPOLITICAL AND ECONOMIC RELATIONSHIP FOR THE NEXT
GENERATION, I WOULD SAY, MANY PEOPLE HAVE MADE MUCH OF THE
FACT THAT THE CHINESE ECONOMY WILL OVERTAKE THE UNITED STATES.
WHERE ARE YOU ON THAT QUESTION, AND WHETHER CHINA IS NOT AS
STRONG AS WE THOUGHT IT WAS ECONOMICALLY, HOW DOES THAT
AFFECT THE RELATIONSHIP? RAY: I THINK IT IS ALMOST LIKE
SPLITTING HAIRS. THEY ARE TWO GREAT POWERS. THE DIFFERENCE OF OVERTAKE --
IF YOU TAKE PURCHASING POWER, PARITY, THE SIZE OF GDP, THEY
HAVE SLIGHTLY OVERTAKEN US, BUT WHO KNOWS?
THE MAIN THINGS, THEY ARE COMPARABLE POWERS IN MANY WAYS.
THEY HAVE A LOT OF DEPENDENCY WITH EACH OTHER AND CAN DO A
LOT OF HARM. THE MOST IMPORTANT THING, I
THINK, IS HOW WE TAKE CARE OF OURSELVES. CAN WE GET STRONG, RAISE
PRODUCTIVITY, BE ECONOMICALLY COHESIVE SO WE CAN BE EFFECTIVE
AND STRONG? YOU CANNOT RULE OUT CHINA.
SINCE I STARTED TO GO TO CHINA IN 1984, PER CAPITA INCOME
INCREASED 28 TIMES. SO IT IS A POWER, IT WILL BE
LIKE THAT. THERE IS NO WINNER OR LOSER,
YOU WILL HAVE EITHER BOTH WINNERS WERE BOTH LOSERS -- OR
BOTH LOSERS. DAVID: COULD THE UNITED STATES COME TO
A FUNCTIONING RELATIONSHIP ECONOMICALLY WITH CHINA?
TO BE WHAT PEOPLE ARE GRASPING FOR, BUT GOING BACK TO 2000 AND
THE WTO, THE THEORY WAS THAT CHINA WOULD BECOME MORE LIKE
THE WEST, BUT IT DID NOT WORK OUT THAT WAY.
WE HAVE DIFFERENT SYSTEMS, WE WILL NOT AGREE ON EVERYTHING,
BUT CAN WE WORK WITH EACH OTHER IN A CONSTRUCTIVE WAY? RAY: IF YOU WORRY, YOU DON'T HAVE TO
WORRY. IF YOU DON'T WORRY, YOU NEED TO
WORRY. IF YOU WORRY, YOU WILL MAKE
SURE THAT THE THING YOU ARE WORRIED ABOUT DOES NOT HAPPEN.
RIGHT NOW, THEY ARE AT THE BRINK.
SO THE UNDERSTANDING OF WHERE THE RED LINES ARE, JUST LIKE
THE SOVIET UNION, MUTUALLY ASSURED DESTRUCTION WAS BY THE
MEANS -- WAS THE MEANS BY WHICH WE GOT THROUGH THAT.
PUSHING EACH OTHER WILL BE THE -- JUST DO NOT CROSS CERTAIN
REDLINES. IN WORLD WAR II, THE UNITED STATES SHUT OFF, EMBARGOED
JAPANESE OIL AND FROZE THEIR ASSETS, SANCTIONS, THEIR BONDS.
IT COULD BE ANALOGOUS WITH CHIPS AND BONDS.
THEY ARE WORRIED ABOUT SANCTIONS.
THERE IS A LIMIT TO BEING STRONG AND THEN THERE IS THAT
ISSUE. I THINK RESTRAINT ON BOTH
PARTIES IS GOING TO BE OF PARAMOUNT IMPORTANCE. DAVID:
ONE OF THE THINGS PEOPLE HOPE FOR, I WOULD SAY, IS
FUNDAMENTAL COOPERATION BETWEEN CHINA AND THE UNITED RATES WHEN IT COMES TO CLIMATE. BY THE WAY, GOING BACK TO YOUR
POINT ABOUT US BEING STRONG, WHAT SHOULD WE BE DOING ABOUT
CLIMATE? RAY:
THERE WILL BE, I EXPECT, SOME SUPERFICIAL, COSMETIC ATTEMPTS
AT COOPERATION ON CLIMATE. THE OTHER, MORE CONTENTIOUS
ISSUES WILL REMAIN SIMULTANEOUSLY. YES, THE CLIMATE ISSUE WAS VERY
INTERESTING. WHEN I DID MY FIRST STUDY, I
SAW THAT ACTS OF NATURE, DROUGHTS, EARTHQUAKES,
PANDEMICS, TOPPLED MORE CIVILIZATIONS AND CAUSE MORE
DEATHS THAN ANYTHING WE HAD SEEN BEFORE. CLIMATE IS CERTAINLY AN ISSUE.
AND IT IS NOT LIKE WE WILL HAVE GREAT SURPRISES, ALTHOUGH GREAT
TECHNOLOGIES ARE COMING, BUT THE WORST IS STILL AHEAD OF US.
I THINK YOU KNOW ENOUGH ABOUT THAT TO SAY, THIS IS NOT AN
EASY OR INEXPENSIVE PROBLEM TO HANDLE.
FORTUNATELY, THERE HAVE BEEN GREAT ADVANCES IN MANY SORTS OF
TECHNOLOGY, BUT THAT IS A LONG AND EXPENSIVE WAY TO GO.
IT WOULD NOT BE EXPENSIVE IF WE AGREED ON HOW TO HANDLE IT.
DAVID: RIGHT NOW, WE SEE, FOR EXAMPLE,
17 STATES ARE ADOPTING LEGISLATION TO RESTRICT THEIR
PENSION PLANS FOR INVESTMENTS BASED ON ESG.
CAN WE ADDRESS CLIMATE AS A NATION WHEN WE HAVE THAT KIND
OF POLITICAL DIVISION OVER ADDRESSING THE QUESTION OF
CLIMATE? RAY: RIGHT. I MEAN, I'M NOT -- I'M NOT
OPTIMISTIC, PARTICULARLY BECAUSE IT IS OH SO VERY
EXPENSIVE. WHAT DO YOU DO WHEN THERE ARE
SO MANY EXPENSES? THE CLIMATE ISSUE, THE SOCIAL
ISSUE, EDUCATION, POVERTY AND SCHOOL DISTRICT -- MY WIFES
WORKS --SCHOOL DISTRICTS. MY WIFE WORKS IN SOME OF THE
WORST SCHOOL DISTRICTS IN THE COUNTRY.
IN CONNECTICUT, 20% OF THE HIGH SCHOOL STUDENTS HAVE EITHER
DROPPED OUT OF HIGH SCHOOL OR HAVE ABSENTEE RATES OF GREATER
THAN 25% AND OUR FAILING CLASSES. THERE IS POVERTY LINES.
WE HAVE SO MANY MISS A CITIES -- NECESSITIES, EXPENDITURES
THAT WE CANNOT AGREE ON HOW TO HANDLE THOSE PROBLEMS. SO THERE
IS A CLIMATE COMPONENT TO IT, BUT A BIGGER, MORE FUNDAMENTAL
COMPONENT. I HOPE WE WILL SEE A STRONG
BIPARTISAN MIDDLE BEAT THE EXTREMES IN THE POLITICAL
SITUATION. BECAUSE IT IS DIFFICULT. DAVID:
LET'S TRY TO END ON A HOPEFUL NOTE HERE, AND GET TO
TECHNOLOGY INVENTION. WHEN YOU FOUNDED BRIDGEWATER
AND I READ ABOUT BRIDGEWATER, YOU PUT A GREAT EMPHASIS ON THE SYSTEMS AND MECHANICS INVOLVED,
THE ENGINE. HAVING DONE THIS FOR 25 YEARS
OR SO, AI MIGHT APPLY THAT FAIRLY EASILY.
IS THAT YOUR SENSE? WHERE ARE WE GOING WITH THIS?
RAY: I AM SO EXCITED. FOR 25 YEARS, I WOULD WRITE
DOWN MY INVESTMENT PRINCIPLES, ALL MY PRINCIPLES AND CONVERT
THEM TO ALGORITHMS, WHICH BECAME DECISIONS, WHICH BECAME
SYSTEMS. EVERYTHING WOULD RUN, AND LIKE SETTING UP A COMPUTER
CHESS GAME, I WOULD PLAY NEXT TO IT AND WE WOULD RECONCILE
DIFFERENCES AND LEARN TOGETHER. NOW WHAT IS HAPPENING WITH
GENERATIVE AIA IS THAT I CAN'T -- AI IS THAT I CAN, ONE CAN
HAVE ALL THAT KNOWLEDGE THERE AND GO BEYOND THAT.
TO HAVE IT IS A THOUGHT PARTNER, INTELLIGENCE HAS
CAPACITIES THAT THE HUMAN MIND DOESN'T HAVE.
WE CANNOT PROCESS SO MUCH OF THE SAME TIME.
SO I AM EXTREMELY EXCITED. I THINK THIS IS THE GREATEST
REVOLUTION, BIGGER THAN THE INTERNET REVOLUTION. BUT LIKE TECHNOLOGY, IT REALLY
DEPENDS -- THE PROBLEM ISN'T WITH THE TECHNOLOGY, THE
PROBLEM IS WITH THE PEOPLE WHO USE THE TECHNOLOGY.
WILL THAT TECHNOLOGY BE USED TO RAISE HUMANITIES LIVING
STANDARDS OR BE USED FOR WAR, IN A SENSE FOR HURTING EACH
OTHER? BUT IF YOU TAKE THOSE FIVE, WE
WILL GO THROUGH A TIME WARP. THE NEXT FIVE TO 10 YEARS, IT'S
LIKE GOING THROUGH A TIME WARP. WE WILL COME OUT THE OTHER SIDE
AND YOU WILL SEE A VERY COMPLETELY DIFFERENT WORLD.
DAVID: I WILL TAKE THAT AS HOPEFUL.
RAY DALIO, OK. A LUMINARY INVESTOR, AND THE
FOUNDER OF RIDGE WATER -- BRIDGEWATER.
