How The Economic Machine Works by Ray Dalio

Sep 22, 2013
20 606 289 Views

Economics 101 -- "How the Economic Machine Works."
Created by Ray Dalio this simple but not simplistic and easy to follow 30 minute, animated video answers the question, "How does the economy really work?" Based on Dalio's practical template for understanding the economy, which he developed over the course of his career, the video breaks down economic concepts like credit, deficits and interest rates, allowing viewers to learn the basic driving forces behind the economy, how economic policies work and why economic cycles occur.

To learn more about Economic Principles visit:

[Also Available In Chinese] 经济这台机器是怎样运行的:
[Also Available In Russian] Как действует экономическая машина. Автор: Рэй Далио (на русском языке):
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  • The editing is soo good such an informative video

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    Manav JainManav Jain54 minutes ago
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  • How many here After watching TANMAY BHAT video 😂😂

    usman kaziusman kazi5 hours ago
  • This video is a true masterpiece, along with Mike Maloney's Hidden Secrets Of Money. I've tried sharing this with people who could really benefit from understanding, but none of them bothered to watch. In the end, I came to the conclusion that when a person is ready to learn they will search on their own. Even when people ask for advice they rarely follow it. Their journey usually begins alone after making the decision in that silence. My only concern is that as time goes by this information will become increasingly difficult to find.

    Mcan DuikenMcan Duiken13 hours ago
  • Very well explained 🙏

    Jagdeep SinghJagdeep Singh18 hours ago
  • I wish USkeys was invented and became popular while I was in College in early 90s. Thank you still. It is not too late. I landed here coz I am widening personal research on Bitcoin and traditional Stock Market.

    ValVal19 hours ago
  • great video

    Carlo ArguellesCarlo Arguelles23 hours ago
  • Love this! Thank you ❤️

    rainniwkwrainniwkwDay ago
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    Elton JonahElton JonahDay ago
  • *Anarcho-Syndicalists be like:* NO NO NO THAT'S NOT HOW IT WORKS

    N. TensityN. TensityDay ago
  • In 1974, after the Yom Kippur War and Arab oil embargo, the Saudis (and from 1975 all other OPEC members) started to sell their oil at an inflated price and for US dollars only. As well as purchasing yachts, sports cars, palaces and private jets for Saudi princes, these petrodollars bought up US Treasury Bonds (effectively a loan to the US government at interest) funding the Cold War arms race and US aid to Israel. They also financed major arms deals with Anglo-American weapons manufacturers and the rest were deposited into US bank accounts. OPEC members account for almost half of global oil production and their insistence on payment solely in US dollars generates an artificial demand for American currency thereby increasing its value. This allows the Federal Reserve to inflate the US currency supply without the risk of hyperinflation. With a huge trade deficit and spiralling, unpayable debt, America increasingly depends on the petrodollar system to help maintain its global empire and high-energy consumer lifestyle. Iraq stopped selling its OPEC oil for US dollars in November 2000 following the launch of the euro. Waleed Higgins

    Waleed HigginsWaleed Higgins2 days ago
  • nice video but where did you get that graph of total usa debt as % od GDP on min 16:41? I would say the values are incorrect... too high...

    MasterLouisMasterLouis2 days ago
  • I'm beginning forced to watch this smh

    MinikuiMinikui2 days ago
  • This video needed to be compulsory in school . and who the fuck dislike videos like this? like you know better or you just mad cuz a billionaire explains something you dont know?

    Tommy TruongTommy Truong2 days ago
    • @Tommy Truong I didn't vote the video down, I'm just saying that I understand why others would. Dalio is probably right here, but Austrian economists might have something to say to him about the appropriate height of bubbles or depths and lengths of depressions. "Blame low interest rates" is never discussed here, it's just taken as a given that the Fed will eventually fall into a "liquidity trap".

      MarkMark19 hours ago
    • @Mark you are getting into the root of capitalism or fundamentals of economics. Both sides can argue back and forth for years so no point. What I am saying is what they are teaching in school is Keynes and how government running the economy also based on Keynes. Stimulus or not, you still have the Fed established decades ago, so you can't run away from it anymore. Therefore, people need to learn how this model works and adapt from it to get better

      Tommy TruongTommy Truong20 hours ago
    • There are reasons to find this video objectionable. Search for the rap video "fear the boom and bust" for a description of why this thinking is short-sighted.

      MarkMarkDay ago
  • I would like to understand the next part of it. I have some questions: 1. After printing more and more money and not taking other measures, what would happen? This is easy for govt and central banks, rich remains rich, although currency with respect to others may fall in long term, but debt could be repaid by printing money and economy can be stimulated... is this not true? if yes, how long can this go before downward trend comes? 2. In current Covid state, many govt printed so much money to save economy, surely it will increase inflation, but will it bring also downturn?

    ambarishMahajanUTubeambarishMahajanUTube2 days ago
  • Inflation is theft. Need to execute FED, Banks, and US governments who end up with $50 million negative balance sheet. Also people who passes laws to favor big corporations. For the suffering of all the people in earth.

    steak mayosteak mayo2 days ago
  • Hi there, great video. Which app has been used to create it?

    Elvira BacciElvira Bacci3 days ago
  • This is pretty good and of course there were caveats expressed, but the economy is less a traditional machine and more like a complex system like in biology or in physics like the weather, i.e., there is a lot of complex nonlinear dynamic behaviour going on that leads to chaotic results. This is why modelling the economy is difficult - it is more like predicting the weather than it is building a deterministic machine.

    Ram SamudralaRam Samudrala3 days ago
  • So much astroturfing in these comments

    Allen RubinAllen Rubin3 days ago

    M MM M3 days ago
  • And only the bankers have a continuous stable growth) first they have the interest on a credit and then they have the government bonds that are only exchanged for green paper. This economic machine works, but not for us. We need a new one.

    Denis FreeriderDenis Freerider4 days ago
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  • Thank you

    Vinay AaravVinay Aarav4 days ago
  • .

    Gustavo RochaGustavo Rocha4 days ago
  • Question. If you are a boomer who got lucky and saw your house price go up 400-500% in 20-30 years [that's the data for my city of Calgary AB, and coincidentally, my age], or if you are currently borrowing to be in that market, is that an investment/asset that is priced correctly right now?... [Or shall we look at stock prices aka valuations? Seems like we are getting some very bubbly prices to me.] Queue the "dun dun dun" dramatic music? Also a last thought. Is the de-coupling of the stock market from the reality of the bottom 20% losing their jobs the best evidence that the money printing is helping "those with financial assets" 25:05 and increasing inequality? Good thing govt's are also giving unemployment cheques at the same time or I think we'd be seeing more of that "social unrest" option.

    Jonathan de RuiterJonathan de Ruiter4 days ago
  • could someone please explain how the EU could print more money for a single country, let's say Italy or Greece? is this the reason why the EU is so frozen in economical growth?

    SonOfOdin777SonOfOdin7774 days ago
  • In Islam the intrest is prohibited. Our prophet Mohamed (SAW) said " any credit brings advantage or intrest is harram/forbiden"

    Abdirizak AbdallahAbdirizak Abdallah4 days ago
  • Great video! Very informative, interesting, and easy to understand, I've airways wanted to learn about the way our economy works in greater detail so I really appreciated this!

    Cassandra AustinCassandra Austin4 days ago
  • Moral of story. Do not take credit.

    fahad ansarifahad ansari5 days ago
  • In a nutshell, the less lazy you are the more money you can make !

    Ryan JungRyan Jung5 days ago
  • This banking intrest system should be banned.

    RA MIGHTY THE 1RA MIGHTY THE 15 days ago
  • How does MMT affect the cycle?

    Dat TruongDat Truong5 days ago
  • Jesus, only managed to get 6 minute in and I start hearing some BS. 'These transactions … are driven by human nature' There is no such thing, only human behaviour, which is determined by environmental conditions #RESOURCEBASEDECONOMY

    nansirnansir6 days ago
  • Brilliant!

    P AnagenesisP Anagenesis6 days ago
  • I learn more about money from this video then from school

    Carlos CamposCarlos Campos6 days ago
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    마마맘마마마마마ᅡ마마맘마마마마마ᅡ6 days ago
  • Keynesian economics are terrible, study Austrian free market economics.

    Cane TiberiusCane Tiberius6 days ago
  • watched this video multiple times. Every time I get new takeaways because my knowledge and life experience has grown.

    cc catcc cat6 days ago
  • This logic works if there is a zero sum at the end. But clearly the national debt has been increasing and it is where we are hiding liabilities. And that is assuming that we are only talking about debt. But reality we have some much unfunded liability that we have robbed and left high and dry.

    take1lookquicktake1lookquick6 days ago
  • Are you a developer? There's a simple way to understand what a monumental disaster The Great Reset is going to be. They aren't running any tests. They aren't doing any simulations. They aren't telling anyone what the design is because there isn't one. They have literally billions of stakeholders they don't seem to care much about.

    Priva CPriva C6 days ago
  • Who is the narrator

    Pratik PatilPratik Patil6 days ago
  • This is really better than attending a class in economics, very well explained, detailed., simple, and very usefull.

    Shane Arleigh AgresShane Arleigh Agres7 days ago
  • Interest is simply unbacked money.

    Farhan AwanFarhan Awan7 days ago
  • Highly informative video.

    Sarthak RathoreSarthak Rathore7 days ago
  • Salute to the hard work behind!

    Muhammad Zain AmjidMuhammad Zain Amjid8 days ago
  • Thank you Ray. I learn a lot from this video.

    Somrithai ChannelSomrithai Channel8 days ago
  • Can we get a 2021 update?

    Beni MegleiBeni Meglei8 days ago
  • ya allah plz forgive me stop watching this.

    Ortiz CalvinOrtiz Calvin8 days ago
  • Sir can we have more economic studies in this way ?

    Trayee DharTrayee Dhar9 days ago
  • can you also make: How The "International" Economic Machine Works

    that guythat guy9 days ago
  • Want to stop cycles? End the federal reserve.

    Based KyleBased Kyle9 days ago
    • This is from keynesian monetarist perspective. I like how it Completely ignores the fact that amount of money you need to repay is more than in existence. To balance this out not only government has to continuously print notes but someone has to be the sucker Within the economy.

      5aral5aral5 days ago
  • Amazing work, really great, thank you Ray Dalio

    navid radnavid rad9 days ago
  • Simply amzing Ray, simply amazing, thank you!

    TosvarsanTosvarsan9 days ago
  • here because of tanmay bhat

    Sai VigneshSai Vignesh9 days ago
  • Economy works like a machine, in a simple mechanical way. Raising productivity, in mechanical terms it means to produce more longstanding robust machines (engine) or provide more affordable cheap maintenance so that everyone can afford buying Auto-Parts or servicing their newer car at a car repair shop of their choice.

    Sencan BozSencan Boz10 days ago
  • This guy explained it so easily!

    FanaticalplelFanaticalplel10 days ago
  • stfu bot army no one gives a flying fuck if you guys are here or not and the world will not change if u came here from some tanmay's stupid video.

    Anish guptaAnish gupta10 days ago
    • Damn you're parents just get divorced or what?

      Jack McCabeJack McCabe7 days ago
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    JustAnotherYoutubeChannelJustAnotherYoutubeChannel10 days ago
  • Watch it again and again, You will see how you understand the economy! This is amazing💯💯

    Abdilaahi KooniAbdilaahi Kooni10 days ago
  • sisisisi stan MONSTA X

    mimiwoon mxmimiwoon mx11 days ago
  • Anybody after Tanmay Bhatt suggesting this

    Swapnil GandhiSwapnil Gandhi11 days ago
  • @tanmay @honestly brings me here cool

    RP RIPRP RIP11 days ago
  • What does an economy look like without credit? Does it eliminate the debt cycle?

    avinash akhalavinash akhal11 days ago
  • This is the most sensible and practical content I've ever seen. Also, thanks Tanmay Bhat.

    Smeet NilvarnaSmeet Nilvarna11 days ago
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    Jonathan DuncanJonathan Duncan11 days ago
  • This didnt age well.

    Jami StevenJami Steven11 days ago

    MSB The EconomistMSB The Economist11 days ago

    MSB The EconomistMSB The Economist11 days ago
  • This lessons can't be learned from college. opportunities are everywhere, Ray gives his valuable lessons in this video for free.🔥 Hats off sir 😍

    SRi ADkSRi ADk11 days ago
  • Seems like we experienced everything in this video in 2020

    James LowJames Low12 days ago
  • Hello all. A man was cheated by a company. Share this video on your page This is just so people know about the scammers. There's no business or money to be made.

    Russian transferRussian transfer12 days ago
  • This needs to be eliminated CENTRAL BANK!

    Free WorldFree World12 days ago
  • Yeah, then the Money has no value due to this kind of thinking

    Samuel RodasSamuel Rodas12 days ago
    • @TW3F4TES5 Money can be used as a store of value. If it is printed as FED has gone in this years it loses its value.

      Samuel RodasSamuel Rodas11 days ago
    • Money has no inherent value.

      TW3F4TES5TW3F4TES511 days ago
  • meeting *robert_uptowntrades* on lnsta gram initiate the beginning of my trading career. i thought stock was a rocket science but the way robert_uptowntrades simplified it just made me rethink. You are the best bro

    donald chrisdonald chris12 days ago
  • look how he's using human nature without any explanation bunch of dumb fuckers!

    Adam chAdam ch12 days ago
  • You are talking about American capitalism that rules the world, not the "economy"!

    Adam chAdam ch12 days ago
  • 💚🤘🏿

    Boyd Odell Tyler BaireGilmoreBoyd Odell Tyler BaireGilmore12 days ago
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    Boyd Odell Tyler BaireGilmoreBoyd Odell Tyler BaireGilmore12 days ago
  • Awesome video thanks Ray!

    Chase SeegarsChase Seegars12 days ago
  • bot army was here...✌😊

    LeGeNd GaMiNgLeGeNd GaMiNg12 days ago
  • This is nothing short of clear and excellent. Thank you for such an informative video. I have learnt a LOT!

    MsidoMsido12 days ago
  • That's a beautiful video.

    Tetyana PayulTetyana Payul12 days ago
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    DionysusDionysus12 days ago
  • Bot Army MArching ...

    Tenny .BTenny .B12 days ago
  • How economy machine works ft. Forest Gump :)

    Ankit AdhikariAnkit Adhikari13 days ago
  • I want to say a massive thank you to this video creator for your great content. Simple explanation, interesting animation and clear voice. You had just made my day

    abrar zrabrar zr13 days ago
  • Who tf is tanmay

    Thomas NguyenThomas Nguyen13 days ago
  • Can we get arround this? We all definitely try. “Cursed is the ground because of you; through painful toil you will eat food from it all the days of your life. 18 It will produce thorns and thistles for you, and you will eat the plants of the field. 19 By the sweat of your brow you will eat your food until you return to the ground, since from it you were taken; for dust you are and to dust you will return.”

    Eli MarcEli Marc13 days ago
  • Very informative and helpful. In 2007 recession, the printing of money did not cause inflation because the money printed went back into financial assets. But in 2020, the printed money went to consumers. Actual income and productivity is down but spending is high, evidenced by high disposal income chart by Fed. So we shall see inflation this time around. Above statements lack question marks but they are all questions.

    Kevin LKevin L13 days ago
  • Those who came from tanmay

    Kaushik AgreKaushik Agre13 days ago
  • With the current political situation in the country, i am really confused if i should sell or hold on to my stock, please i need your honest suggestions on the best thing to do to avoid losses.

    DriftgodDriftgod13 days ago
    • Hold. The money supply is super high. When the money supply is high stocks tend to go higher

      RoccoRocco11 days ago
    • President Trump should concede defeat and save the country from further chaos.

      Claudia JordanClaudia Jordan13 days ago
    • @Rachael B Thanks for your honest guidance, i will look up the broker immediately.

      DriftgodDriftgod13 days ago
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      Rachael BRachael B13 days ago
  • Don't wanna see another comment saying "who's here after watching tanmay's video "

    Defalt GamerDefalt Gamer13 days ago
  • Crucial parts of the video relied on knowing things about human nature, interesting. Last I heard philosophers and theologians are still arguing that one, but its a good thing you have it figured out already.

    Ismail IbrahimIsmail Ibrahim13 days ago
  • Honestly, I believe this is his admission he is running a ponzi scheme.but its ok because the US economy is a ponzi scheme also.

    Psalm 91Psalm 9113 days ago
  • I love this video, I keep coming back to it :)

    Money on My MindMoney on My Mind13 days ago
  • Brilliant! Concise and precise! 👍👍👍👏👏👏💯💯💯

    Eva LiuEva Liu13 days ago
  • Nice.

    Liudmila Y VasilyevaLiudmila Y Vasilyeva13 days ago
  • Wow.. Mind-blowing video. Wonderful topic and explained it so nicely.. very very very well done 👌

    Praveen RanjanPraveen Ranjan13 days ago