Ray Dalio, a billionaire investor and founder of the US hedge fund Bridgewater Associates, has warned that the United States faces economic risks that go beyond a typical recession. On Sunday, he told NBC’s Meet the Press that the world is at a critical turning point characterized by deep changes in political, economic and geopolitical order – factors that have led to severe crises in the past, according to Dalio.
The hedge fund founder explained: “I think we are at a crossroads and very close to a recession. And I fear something worse than a recession if we don’t handle it well.” According to him, the US economy faces several overlapping challenges: increasing debt, internal political divisions, growing geopolitical tensions and global power shifts.
“These times are very similar to the 1930s” he warned. “Take tariffs, take debt, take the rising power challenging the existing power – these changes in orders, systems, are very, very destructive.” He also compared the situation to previous economic crises: “This could be like the collapse of the currency system in 1971. Or like 2008. It will be very severe. I think it could be even more severe than these two, if these other things also happen.”
While acknowledging that tariffs can be a useful tool to stimulate production and generate revenue, Dalio also pointed out that the method of implementation is crucial: “The way this is done – whether in a practical and stable manner, through high-quality negotiations, or in a chaotic and destructive way that leads to large conflicts – is a significant difference.”
He described Trump’s recent tariff measures as “very destructive.” According to him, the real test will only come after the end of the current 90-day negotiation period. “What has been introduced there is like throwing stones into the production system” he explained and warned of “enormous” effects on global efficiency and costs.
Goldman Sachs last week raised the likelihood of a recession in the US within the next 12 months to 45% after Trump announced a minimum tariff of 10% on all imports from April 2nd, but before he suspended further “reciprocal” tariffs of 11% to 50% for dozens of countries for three months. China, however, was still imposed with a 145% import duty, which was met with a 125% counter-tariff.