Bridgewater Says Europe Facing 'Debt Implosion'
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Bridgewater Associates LP, the hedge fund founded by Ray Dalio that manages about $120 billion in assets, said the European debt crisis has been poorly managed, bringing Europe closer to a "debt implosion" or a currency collapse.
The breadth of the global slowdown creates a dangerous dynamic because, given the inter-connectedness of economies and capital flows, one country's decline tends to reinforce another's, making a self-reinforcing global decline more likely and a reversal more difficult to produce, said the hedge fund in a report.
Europe is in the "most critical" stage of a global deleveraging process, as deteriorating finances in France and differences with Germany make it less likely that the region’s strongest economies will pick up the tab to solve the region’s debt crisis.
Bridgewater had 3 of the industry's 12 best performing funds last year.
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The breadth of the global slowdown creates a dangerous dynamic because, given the inter-connectedness of economies and capital flows, one country's decline tends to reinforce another's, making a self-reinforcing global decline more likely and a reversal more difficult to produce, said the hedge fund in a report.
Europe is in the "most critical" stage of a global deleveraging process, as deteriorating finances in France and differences with Germany make it less likely that the region’s strongest economies will pick up the tab to solve the region’s debt crisis.
Bridgewater had 3 of the industry's 12 best performing funds last year.
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