Ray Dalio warns of looming recession and global economic peril
- 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 tariff policy.
According to the billionaire, the chaos associated with Donald Trump's tariff and economic policy 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 - said Dalio on CNBC News' "Meet the Press."
The end of the American order?
Ray Dalio, who for years has believed that China should not be underestimated, said on American television that he is concerned about trade disruptions and the growing U.S. debt. Furthermore, attention must be paid to the shift in the global balance that occurred after the end of World War II. The United States is 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. An element of this history is Donald Trump's tariff policy, which has an understandable goal but is being implemented in a "very disruptive" manner.
The billionaire also pointed out that the federal deficit should be reduced to 3 per cent 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 noted.
"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," it reads.
Ray Dalio is the founder and co-manager of the hedge fund Bridgewater Associates. It is one of the largest firms of its kind on the market, managing assets estimated at $124 (CAD 172) billion. Dalio's wealth is estimated at about $14 (CAD 19) billion. During the last presidential elections in the U.S., he did not support either Donald Trump or Joe Biden. He called the former a "fascist," while describing Biden as "weak." Ultimately, Biden stepped down from the race, and Kamala Harris, who lost to Trump, fought for the White House.
