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Ray Dalio, the billionaire fund manager who was among the experts to advise the US Federal Reserve in recent months, has said interest rate cuts are not the solution to the turmoil in the credit markets.

“The basic problem is that, at current exchange rates, Americans will not earn enough income to pay for their spending, so they will either get deeper into debt or sell off their assets to make up the difference,� he said.

“When the Fed lowers interest rates, it just postpones the problem because it causes debt-financed consumption to pick up.�

Amen Brother Ray!

raydalio.jpg
Ray Dalio, who is able to see trees for the forest.

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