Billionaire investor Ray Dalio believes it is “too late” to combat the economic fallout of Trump’s tariffs and says the world economic order, with the US at the center, is breaking down.
“Based on many of my indicators,” he wrote in a social media post, “it appears that we are on the brink of the monetary order, the domestic political and the international world orders breaking down due to unsustainable, bad fundamentals.”
Dalio is the founder of Bridgewater Associates, the largest hedge fund by assets, who became famous on Wall Street for anticipating the 2008 financial crisis. He is also something of a perennial doom forecaster. Last year, he told the Wall Street Journal that he “got it wrong” with his 2023 forecast that the US economy was entering a debt crisis.
In a lengthy post on X Monday, Dalio said he had heard from a growing number of people, including exporters who trade with the United States, who recognize that “whatever happens with tariffs … radically reduced interdependencies with the U.S. is a reality that has to be planned for.”
“It is also increasingly being realized that the United States’ role as the world’s biggest consumer of manufactured goods and greatest producer of debt assets to finance its over-consumption is unsustainable.”
The post comes as investors, business leaders and governments around the world are desperate for clarity about the strategy behind of President Donald Trump’s tariffs. Foreign investors have retreated from dollar-backed assets and US Treasuries amid widespread concerns about the future stability of the world’s largest economy.
While it’s unlikely to happen overnight, market participants and academics are contemplating a future in which the US dollar is no longer the global reserve currency. According to Dalio, whose warning came with a promotion of his new book, investors would be “naive” to assume that they can keep lending to the US and get paid back in “hard” dollars, meaning currency that isn’t devalued.
“There is a growing risk that the United States…will increasingly be bypassed by a world of countries that will adapt to these separations from the United States and create new synapses that grow around it,” he wrote.
Dalio isn’t the only billionaire to sound the alarm over Trump’s policies. Jamie Dimon, CEO of JPMorgan Chase; Stanley Druckenmiller, founder of the Duquesne Family Office; hedge fund investor Bill Ackman and others have all publicly fretted that the trade war the president set off could hurt the American economy.
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