icon
icon
icon
icon
$300 Off
$300 Off

News /

Articles /

Ray Dalio Warns of Global Order Collapse Amid Debt, Political Disorder

Word on the StreetTuesday, Apr 8, 2025 11:10 am ET
2min read

On April 2, U.S. President Trump signed an executive order imposing so-called "reciprocal tariffs" on trading partners, causing a brief market panic. During this period, Ray Dalio, the founder of bridgewater, warned investors not to be distracted by short-term market fluctuations.

On April 8, Dalio posted on LinkedIn that what is happening now is far more significant than the impact of tariffs—we are in the midst of a once-in-a-lifetime systemic collapse of the global monetary, political, and geopolitical order.

Dalio identified five fundamental forces driving this transformation: the collapse of the monetary order, political disorder, the reshaping of the geopolitical order, technological change, and natural disasters.

Dalio emphasized that the current monetary order is unsustainable due to unsustainable debt levels. Major economies, such as the United States, are burdened with high debt levels that continue to rise rapidly, while creditor nations hold excessive debt assets and rely heavily on exports to debt-ridden countries. This imbalance is exacerbated by a lack of trust among major nations, with concerns over supply chain disruptions and debt repayment issues. Dalio believes that the current system, where debt-ridden countries borrow heavily and creditor nations export and purchase debt, will be forced to change. The unsustainable growth of U.S. government debt will have profound impacts on capital markets and the broader economy.

Political disorder is another key factor in the collapse of the current order. Dalio highlighted deep-seated social inequalities, including disparities in education, opportunities, productivity, income, and wealth. This has led to a polarization between right-wing and left-wing populists, each vying for power and control. This political extremism undermines democratic institutions, which rely on compromise and the rule of law. Economic issues further exacerbate these political tensions.

The geopolitical order is also undergoing a significant shift. Dalio noted that the era of a single dominant power setting the rules, with other nations following, is over. The U.S.-led multilateral world order is being replaced by unilateralism and the principle of "might makes right." This transition could lead to increased trade friction, geopolitical conflicts, and competition in technology and military domains.

Technological advancements and natural disasters are additional forces reshaping the world. Natural disasters, such as droughts, floods, and pandemics, are becoming more destructive. Technological changes, particularly in artificial intelligence, are deeply impacting various aspects of life, including economic, political, and international relations.

Dalio urged investors not to be distracted by dramatic news like tariffs but to focus on these five fundamental forces and their interrelationships. He believes that the current crises are not isolated events but part of a historical cycle of collapse and renewal. Throughout history, collapses in monetary, political, and geopolitical orders have led to periods of depression, civil war, and world wars, ultimately resulting in the establishment of new orders. Dalio's warnings serve as a reminder that understanding these underlying forces is crucial for navigating the current global landscape.

Comments

Add a public comment...
Post
User avatar and name identifying the post author
Charming_Raccoon4361
04/08
Debt's the shadow looming over us all. Who's got a plan B for when the music stops? 🤔
0
Reply
User avatar and name identifying the post author
qw1ns
04/08
Dalio's take feels like a call to wake up and smell the coffee. Markets are just tip-of-the-iceberg indicators.
0
Reply
User avatar and name identifying the post author
pd14200
04/08
Geopolitical chess game intensifies. Who benefits from the power vacuum? Keep your eyes on the players.
0
Reply
User avatar and name identifying the post author
MasterDeath
04/08
@pd14200 Who do you think will fill the void?
0
Reply
User avatar and name identifying the post author
paperboiko
04/08
@pd14200 Agreed, power shifts r real.
0
Reply
User avatar and name identifying the post author
AbuSaho
04/08
Debt spiral's real villain. Imagine if $USD loses its throne. New world order could mean new investment playground.
0
Reply
User avatar and name identifying the post author
Luka77GOATic
04/08
@AbuSaho What if emerging markets rise?
0
Reply
User avatar and name identifying the post author
joe_bidens_underwear
04/08
Wow!I successfully capitalized on the NFLX stock's bearish trend, generating $379!
0
Reply
Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.
You Can Understand News Better with AI.
Whats the News impact on stock market?
Its impact is
fork
logo
AInvest
Aime Coplilot
Invest Smarter With AI Power.
Open App