Here's a full version of Mr. Dalio's words, and below is a summary. Also, he's written several books on this topic, more info here.
While tariffs and their market impacts dominate headlines, the deeper, more critical issue is the breakdown of the global monetary, political, and geopolitical order—a rare, once-in-a-lifetime shift driven by unsustainable debt, inequality, and deglobalization.
Key forces at play:
Monetary/Economic Order Collapse: Unsustainable debt imbalances (e.g., U.S. overborrowing, China over-lending) are forcing a restructuring of global trade and capital flows.
Domestic Political Fragmentation: Rising inequality and populism are eroding democracies, paving the way for autocratic leadership.
Geopolitical Power Shifts: The U.S.-led multilateral order is fading, replaced by unilateralism and conflict (trade wars, tech wars).
Climate & Tech Disruptions: Natural disasters and AI will further destabilize economies and international relations.
Why focus on these? Tariffs are symptoms, not causes. History shows such imbalances lead to depressions, wars, and new orders. Policymakers must prepare for radical measures (debt defaults, capital controls) as the old system unravels.
Ray Dalio, head of the world's largest hedge fund, warns that we're misreading current events. He believes the biggest issue is that we're at a turning point in a long-term global cycle caused by excessive debt.
byu/lughnasadh inFuturology
18 Comments
The old world is dying; the new world struggles to be born. Now is the time of monsters.
Would be better to have debt now?
When debt explodes money will have less value, but the house will still be yours.
Well crap. But hey, at least even though we were born too late to invade the Middle East, and too early to invade the Middle East, we’ll still probably get to invade the Middle East.
World orders may come and go, but invading the holy land always remains.
A lot of our wealth is structured on faith in institutions. Trump is destroying that faith. Yes we had preexisting structural problems, but we could have dealt with those with thought, hard work, some sacrifices, and good choices. The shock and awe approach we are witnessing is bringing the whole house down.
Dalia isn’t breaking ground here. The fact is that he and all of the other giant fund “managers” have been playing poker with this information and now the hens are coming back to roost. Now they have to regroup and tell us that they will have to make ever more radical bets on the global market, given that they all turned their backs on the job of running the world, preferring to live it up in the box seats where they can keep their hands clean.
I really like Ray but he’s sort of been saying this for quite about a decade.
U.S. debt is not a problem at all as all this debt is nominated in dollars and FRS can always print more.
So Ray is down with tariffs? Can’t really tell by his statement
Dude wrote the book on this: the changing world order. He’s pretty spot on with the timing, and the factors. We’ll be spread too thin in too many wars (trade wars count, as the point is fiat anemia), there will be another power coming along to take the reserve currency mantle from us, and it’ll happen gradually, then all at once.
I could go on, but he is unique in how he’s looking at this time.in history through a reserve currency shift of power lens. America had its time, and it’s about as long as typical.
This seems like ignoring the gunshot wounds to complain about the patients high blood pressure and sedentary lifestyle.
Or ignoring the mans knee on his neck for 9 minutes because he haf opiates in his system.
Income matters for debt. Owing someone a dollar if you’re my 4-year old is a major deal because he has no way to pay that back. For me it’s a triffle because it’s only a dollar.
Debt as a share of GDP has been consistently taking over the past umpteen years (except where it jumped back up for Covid then continued to fall again).
Also, note how or population is increasing. But the population wasn’t increasing as far as additional income from the increased number of people.
So yes, we’re slashing debt now, but we’re slapping income at an even faster rate, and we were already on the path to slash debt.
Yeah it’s the general issue we face.
While idiots create new issues out of nothing, we are ignoring the real issues and making them worse and worse.
There are massive bombs waiting in society to go off, in terms of debt, pensions, climate change, etc.
And we are ignoring them in favour of dealing with… trans women in sport.
The fix is in. They know they’ve doomed the world they’re just trying to position themselves to come out on top.
We are in the middle of a coup by a group of oligarchs and Dalio is calling a debt crisis
“Tariffs are symptoms, not causes”
I’m sorry, but this isn’t even remotely close to true. Tariffs can be attributed, largely (pun intended), to one man. donald trump. That’s not a symptom; thats a very deliberate cause that then delivers symptoms; of which we are all privvy to.
Stop listening to these dickb$gs in finance. They exist to swindle you, and that’s all they see us as; financial cannon fodder.
F@ck these people.
[Investors are losing faith in Ray Dalio’s risk strategy after a lackluster five-year run, and pulling out their cash—’it’s been disappointing for a long time’](https://fortune.com/2024/04/23/lackluster-returns-ray-dalio-investing-strategy-investors-pull-billions/)
From April 2024.
Tariffs are neither a cause nor a symptom. They are a weapon. How can you say that trade wars are a cause of this, and say tariffs are a symptom? Are bullets a symptom of war? No, death and injury is a symptom, bullets are the weapon.
But saying that helps point to who is doing all of this. Who has agency, and isn’t just a byproduct.
The warnings are useless unless they point to the *humans* causing this stuff. This isn’t the weather. People have control over what’s happening.
Grow a backbone, Dalio.
I still blame Nixon. Never should have gone off the gold standard.
Shit was just fine until you know who came along and decided tariffs were a cure for literally everything. He’s like the guy in my big fat Greek wedding that uses windex to cure everything