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“Ray Dalio is betting 9 billion euros on a recession in Europe! » Editorial by Charles SANNAT – Insolentiae

My dear impertinents, dear impertinents,

Ray Dalio is not just anyone and I regularly talk to you about his positions. Since he sold his historic bond fund, Ray Dalio has a freedom of speech that he uses to the full, notably through a blog where he writes very regularly on his analyzes of the world economic situation.

“Bridgewater, Ray Dalio’s hedge fund, has increased its short positions in European stocks to 9 billion euros, as the mogul says recession is ‘more likely’.

“Given deteriorating fundamentals and high inflation, I’m not surprised the sentiment is that this could be the start rather than the end of the correction,” notes Patrick Ghali, co-founder of Sussex Partners, quoted by FinancialNews.

The last time Bridgewater disclosed short positions of this size was in the first quarter of 2020 when the coronavirus pandemic hit.

When Ray Dalio is betting 9 billion dollars on a recession in Europe, it is better not to brush aside this bet from one of the biggest financiers on the planet.

Why a recession in Europe?

Because the ECB will not be able to raise rates that much, and the ECB will have to fight against the “risks of fragmentation” of the euro zone, which implies letting the currency slip away and therefore letting inflation slip away.

Inflation cannot be easily contained in Europe from a monetary point of view.

Then inflation will be reinforced specifically in Europe by our sensitivity to Russian energies. If we succeed in doing without too many shortages, rationings and cuts, it will be at the cost of a significant price increase.

Added to this will be the chronic weakness of the euro against the dollar, which will also amplify inflationary pressures.

Logically, company margins will fall and production levels will be permanently impacted downwards.

There is no objective reason not to be optimistic or pessimistic, but to see at this stage anything other than a good recession, particularly in Europe where the cost of the war in Ukraine is ours.

We follow a suicidal economic policy that only benefits US hegemonic interests.

We are being bullied and European countries are being sacrificed on the altar of American world domination.

And that’s just the beginning.

It is already too late, but all is not lost.

Prepare yourselves !

Charles SANNAT

“Insolentiae” means “impertinence” in Latin
To write to me charles@insolentiae.com
To write to my wife helene@insolentiae.com

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Source Investing.com here

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