Ray Dalio warns of economic storm bigger than a recession
“Right now we are at a decision-making point and very close to a recession,” confessed Ray Dalio, billionaire and director of the world's largest hedge fund, Bridgewater. In his opinion, Congress should reduce the federal deficit. Otherwise, the U.S. faces something worse than a recession. Dalio also criticized Donald Trump's trade policy.
According to the billionaire, the chaos caused by Donald Trump's trade and economic policies threatens the global economy.
Right now we are at a decision-making point and very close to a recession. And I’m worried about something worse than a recession if this isn’t handled well,” assessed Dalio on the NBC program "Meet the Press."
The end of American order?
Ray Dalio, who has said for years that China should not be underestimated, stated on American television that he is concerned about disruptions in trade and the growing U.S. debt. Additionally, attention must be paid to the imbalance in the world order that emerged after the end of World War II. The United States is said to be losing its position as a hegemon.
“We are going from multilateralism, which is largely an American world order type of thing, to a unilateral world order in which there’s great conflict,” he stated.
The 75-year-old believes that five elements influence the course of history: the economy, internal political conflict, international order, technology, and natural disasters such as pandemics and floods. Part of this history includes Donald Trump's trade policy, which has an understandable goal but is being implemented in a "very disruptive" manner.
The billionaire also noted that the federal deficit should be reduced to 3% of GDP. Otherwise, Americans will have a problem with the demand and supply of debt at the same time. “The results of that will be worse than a normal recession,” he emphasized.
"The very value of money is at stake. A breakdown in the bond market, combined with events like internal and international conflict, could be an even more severe shock to the monetary system than President Richard Nixon’s cancellation of the gold standard in 1971 and the global financial crisis in 2008," the statement reads.
Ray Dalio is the founder and co-chief investment officer of the hedge fund Bridgewater Associates, one of the largest firms of its kind in the market, managing assets estimated at $124 billion. Dalio's fortune is valued at about $14 billion. During the last U.S. presidential elections, he did not endorse either Donald Trump or Joe Biden. He called Trump a "fascist," while referring to Biden as "weak." Ultimately, Biden stepped down from the race, and Kamala Harris fought for the White House, losing to Trump.
