Dalio's article, "An In-Depth Look at Deleveragings" is apparently authored by him. It concludes that the best way to "deleverage" is a "proper" combination of debt reduction (defaults and restructurings) and debt monetization (monetary inflation). This is what he considers to be a "beautiful" deleveraging whereas deleveraging by debt reduction and austerity are "ugly." The ugly ones cause recessions/depressions and deflation which is bad. Beautiful deleveragings minimize debt reduction and revive economies with monetary stimulation....
Dalio defines a beautiful deleveraging as one "in which enough 'printing' occurred to balance the deflationary forces of debt reduction and austerity in a manner in which there is positive growth, a falling debt/income ratio and nominal GDP growth above nominal interest rates....
What he calls "ugly", an austerity and debt reduction, is actually "beautiful". While it is painful, it is painful for a much shorter period of time and enables the "economy", i.e., people, to go bankrupt, repair their finances, start saving again, create new capital, and then create new economic growth and jobs. By preventing or delaying this process the policy makers only doom us to economic stagnation, inflation, and permanent high unemployment. And I fear that is exactly where we are headed.Read it at Zero Hedge
Ugly = Beautiful; Beautiful = Ugly: Ray Dalio On Deleveraging
What Austrians don't seem to get is that the art of deleveraging, should it become necessary due to Ponzi finance as Fisher and Minsky describe, is to reduce debt overhang with minimal capital destruction. Austrians want to "liquidate malinvestment due to credit excess and don't seem to get that in a debt-deflation this involves massive capital destruction in an indiscriminate fashion. So recovery begins from a quashed capital base. That's ugly to me.
Monetarist solutions involve high unemployment and significant idle resources for some time. Hardly "beautiful."
The MMT solution for rebalancing is to provide the necessary net financial assets to non-government in order to offset increased saving desire and make space for deleveraging, while maintaining output and employment. Now that's elegant.