Last week, as the market was in free fall amid a perfect storm characterized by a concurrent selloff in bonds and stocks and a Minksy moment for the VIX, Ray Dalio took to LinkedIn to “explain” the problem.

I’m not entirely sure who he thinks his audience is these days, because the post was so superficial as to be barely worth reading. All he did was reiterate the policy dilemma created by rising inflation expectations and a late cycle dynamic that puts the Fed in a position where they have to choose between hiking to curb price pressures at the risk of making a “mistake” (i.e. hiking the economy into a recession) on the one hand and falling behind at the risk of the curve bear steepening aggressively on them possibly catalyzing a disorderly unwind of the bond trade on the other. To wit:

Over the past week or so, we had reports of strong growth and rising wages (good things!), which sent bonds and stocks down (bad for most investors) due to justifiable fears that the Fed will tighten faster than is priced in the credit markets. The surge in growth and wages came because of both the fiscal stimulation and the rekindling of animal spirits, thrusting the economy into late-cycle capacity constraints, which is leading to the expectations of faster Fed tightening. In other words, fiscal stimulation is hitting the gas, which is driving the economy forward into the capacity constraints, which is triggering interest rate increases that are hitting the brakes, first in the markets and later in the economy. This confluence of circumstances will make it difficult for the Fed to get monetary policy exactly right.

He closed on a “happy” note which is something of a break with recent Dalio precedent. Here he is telling you that this was but a blip on the radar screen:

To be clear, I’m not claiming to be smart about this. In fact, the opposite is true, as this is happening sooner than I expected. Still, these big declines are just minor corrections in the scope of things, there is a lot of cash on the side to buy on the break, and what comes next will be most important. As shown, the recent price declines are not even noticeable within context of the bigger and longer term picture.