Ray Dalio, founder of Bridgewater Associates, warns of a significant threat overshadowing the global market’s fixation on tariffs. In a recent social media post, Dalio cautions against believing that tariffs are the primary driver of market turmoil. Trade actions do impact the market, but Dalio emphasises that deeper forces are at play.
.
The real issue, according to Dalio, is the breakdown of the world’s foundational structures. This includes monetary, political, and geopolitical orders. Such breakdowns are rare, occurring about once in a lifetime, but they have repeated throughout history when conditions became unsustainable. Dalio warns that the biggest disruptions are yet to come, and investors should prepare for a transformative shift.
.
Dalio’s perspective suggests that President Donald Trump’s tariff policies are symptoms of broader systemic issues, not the root cause. Recognising the true nature of these changes can help investors and policymakers navigate the complex market landscape. They can prepare for challenges ahead and make informed decisions to mitigate potential risks. As the global economy evolves, understanding the deeper forces at play is crucial.
The Crumbling Global Order
Ray Dalio attributes the decline of the post-World War II global order to excessive debt loads, widening domestic inequalities, and the unravelling of U.S.-led international cooperation. Key evidence of this shift includes the erosion of middle-class jobs in the U.S., China’s rising influence, and growing distrust between global powers, rendering the existing order untenable.
Domestic and Global Consequences
In addition to economic fragility, Dalio warns of a fraying domestic political system and the breakdown of democratic norms, fueled by vast disparities in education, opportunity, productivity, income, wealth, and values. These gaps drive polarisation and empower extreme factions. Globally, the U.S. has transitioned from a multilateral leadership model to a more unilateral approach, further complicating international relations. Dalio advises observers to look beyond surface-level events and examine the interplay of five major forces—debt, politics, international power, nature, and technology—that are reshaping the world.
The Impact of Technological Advancements
Moreover, Dalio highlights the role of technological advancements in accelerating these changes. Rapid technological progress is not only disrupting traditional industries but also exacerbating existing inequalities. As automation replaces jobs, those without the necessary skills are left behind, further widening the gap between the rich and the poor. This underscores the need for policymakers to prioritise education and retraining programs.
The Rise of Alternative Global Powers
The Rise of Alternative Global PowersFurthermore, the shift in global power dynamics is also a significant concern. As the U.S. retreats from its role as a global leader, other nations are stepping in to fill the void. China’s growing influence, in particular, is reshaping global governance and challenging the existing order. This shift has significant implications for international relations, trade, and security.
Preparing for the Future
To navigate these changes, Dalio advises investors and policymakers to adopt a more nuanced understanding of the complex forces at play. This requires a deep understanding of the interplay between debt, politics, international power, nature, and technology. By recognising the true nature of these changes, we can better prepare for the challenges that lie ahead and build a more resilient future. This involves diversifying investments, prioritising education and retraining programs, and fostering greater international cooperation.
- Broker
- Min Deposit
- Score
- Visit Broker
- Award-winning Cryptocurrency trading platform
- $100 minimum deposit,
- FCA & Cysec regulated
9.8
- 20% welcome bonus of upto $10,000
- Minimum deposit $100
- Verify your account before the bonus is credited
9
- Over 100 different financial products
- Invest from as little as $10
- Same-day withdrawal is possible
9.8
- Fund Moneta Markets account with a minimum of $250
- Opt in using the form to claim your 50% deposit bonus
9
Learn to Trade
Never Miss A Trade Again
step 1
Signal Notification
Real-time signal notifications whenever a signal is opened, closes or Updated
step 2
Get Alerts
Immediate alerts to your email and mobile phone.
step 3
Entry Price Levels
Entry price level for every signal Just choose one of our Top Brokers in the list above to get all this free.
