Davos-Klosters (Switzerland), Jan 25 (IBNS): Speaking Friday at the 43rd World Economic Forum (WEF) Annual Meeting, Ray Dalio, Founder and Chief Investment Officer of Bridgewater Associates, warned against a growing liquidity bubble.
"When spending picks up, it will be incumbent on the central banks to mop excessive liquidity up," he said, warning against inflation risk.
Dalio described the new norm as being a depressed economy, saying the discussion will shift from liquidity to productivity.
"Productivity will be the driver," he said. "The debt cycle will no longer be the driver; 2013 will be a transition year and the shift of cash will be a game changer."
Dalio was speaking on a panel which included Anshu Jain, Co-Chairman of the Management Board and the Group Executive Committee, Deutsche Bank; Jin Liqun, Chairman of the Board of Supervisors, China Investment Corporation (CIC); Pierre Moscovici, Minister of Economy and Finance of France; Brian T. Moynihan, Chief Executive Officer, Bank of America; and Ignazio Visco, Governor of the Bank of Italy.