From: Jeffrey Epstein <jeevacation@grnail.com>

From: Jeffrey Epstein <jeevacation@grnail.com> To: Bill Gates Subject: Re: FW: A video of my template for "How the Economic Machine Works" Date: Thu, 31 Oct 2013 13:37:26 +0000 I have now given out the video without attribution to 12 people. 6 i told ray dalio prepared it, 6 i told it was done by a local kid here in the VI. the reviews were highly skewed to say the least. those that saw what they believed to be rays . thought interesting and maybe insightful. those that thought it was done by a kid thought it simple minded. On Wed, Oct 30, 2013 at 7:34 PM, Bill Gates < > wrote: Ray did a strong job on this video which I promoted in a tweet... I will be interested to get your reaction to it if you have a chance to look at it. From: Ray Dalio [mailto: Sent: Wednesday, October 16, 2013 11:08 AM To: Bill Gates; Elizabeth Loy Subject: A video of my template for "How the Economic Machine Works" Dear Bill, I know that you are terribly busy with very important matters. Nonetheless, I would appreciate you taking 30 minutes to view the video "How the Economic Machine Works". Besides possibly helping me, I believe that it might help you. I distilled everything I have to say about economics into this 30 minutes. I did this simple video because I believe that most influential decision makers and most people cause a lot of needless economic suffering because they are missing the fundamentals shown in that template. I know this first hand because I speak to most countries' finance ministers and central bankers about their challenges and they agree that this template is more practical and much easier to understand than conventional economic thinking. EFTA00975566 Paul Volcker said of this template: "Ray Dalio's "template" may be unconventional but it casts strong light on how the economy actually works, with its history of repetitive and ultimately destructive excesses in credit creation. The analysis points the way to practical ways central banks and governments can ease the pain of defaults and de-leveraging. An even larger lesson for both policy makers and the public would be to understand how to anticipate and moderate the excesses. The animated video of the template is an intriguing "teaser", but serious economists and officials should read and absorb the insights of Dalio's written text." On YouTube there were 3,742 Favorable ratings and 100 Unfavorable ratings. It is logical and our track record from using it is well established. I now want to share it because I believe that understanding it could help prevent big economic blunders. It is based on my belief that everything you need to know comes from following the transactions, the people behind them and their motivations. Therefore the vague "market" reactions should be a thing of the past and replaced with much better attributions. This transactions-based approach implies clear paths for addressing big and controversial issues like whether "printing money" is inflationary. For example, if we agree that demand is best measured by spending that is made-up of both money and credit and that an increase in the growth rate of money spent can offset a slowing of the growth rate of credit spent, then we know that it won't lead to inflation. It implies that the effects of QE should be understood by tracking transactions though the system (by following what is bought from whom and why). It implies that the conventional MV=PG perspective is misleading because there really isn't much "velocity" of money happening as most of what we call velocity is credit growth, which is very different and has different reasons for happening. Velocity is made out to be some vague force that drives the rate that money goes around, and it's not that at all. I believe that we should agree that spending comes from either money (with a bit of velocity) or credit and we should understand how each is made-up and spent to make nominal GDP. It implies that traditional supply/demand curves that measure both in terms of quantity don't make much sense because the price of anything is equal to the total amount of money and credit spent on it divided by the quantity of it (goods, services and financial assets) sold, and that by tracking this spending back to each spender of money and credit and each seller of goods, services and financial assets (and knowing their motivations) everything adds up. EFTA00975567 It helps to explain debt cycles -- what drives starts them, what sustains them and what reverses them -- and how they affect spending and asset prices, which is different from conventional economic thinking. If you find it interesting, I'd be happy to discuss it with you and then, if you find it valuable, I'd like you to pass it to others. Are you willing to do that? Best Regards, Ray httplAvww.economieprinciples.org/ This message is intended exclusively for the individual(s) or entity to which it is addressed. It may contain information that is proprietary, privileged or confidential or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate this message or any part of it. If you have received this message in error, please notify the sender immediately by e-mail and delete all copies of the message. The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of Jeffrey Epstein Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com, and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA00975568