One thing is for sure about billionaire Ray Dalio; something bad is coming, at some point – because there’s just too much bad shit happening to reconcile. The Bridgewater founder has warned about a brutal AI war between the US and China (which Eric Schmidt recently echoed) and that the UK is in a ‘debt death-spiral’ (to moderate pushback), among other things.
Now, Dalio is warning that the U.S. may be entering a new kind of “civil war” amid rising inequality and debt, as well as a breakdown in the global geopolitical order. In an interview with Bloomberg TV which aired this week, Dalio said that the forces which “shape the world” were all now being disrupted, and that America served as a prime example of this.
“We’re in wars. There is a financial, money war. There’s a technology war, there’s geopolitical wars, and there are more military wars,” Dalio explained. “And so we have a civil war of some sort which is developing in the U.S. and elsewhere, where there are irreconcilable differences.”
Dalio has this year issued several warnings about the risks posed by America’s rising national debt, which currently stands at a staggering near $38 trillion. Additionally, the billionaire also highlighted the country’s debt-to-income ratio of roughly 120 percent as potentially leading to a situation in which repayments sap government finances and trigger a “death spiral” for the economy.
Dalio reiterated warnings that US government debt is rising too quickly, fueling a climate “that’s very much analogous” to the years before World War II.
When debt rises relative to income, “it’s like plaque in the arteries that then begins to squeeze out the spending,” Dalio, 76, said in an interview with Leaders with Francine Lacqua that aired Friday.
The billionaire investor has long cautioned of the risks of spiraling US debt, contending last month that it’s posing a “threat to the monetary order.” He blamed politicians on both sides of the aisle and has called for a mix of tax-revenue increases and spending cuts to tackle what he calls the “deficit/debt bomb.”
…
Debt held by the public amounted to 99% of US gross domestic product last year, according to estimates from the Congressional Budget Office. That number is projected to reach 116% of GDP in 2034, higher than any point in US history.
Surging debt is just part of the problem, according to Dalio. Festering global conflicts and wealth inequality are also creating an environment with “plenty to worry about,” he said. -Bloomberg