- Ray Dalio believes the world’s economy will face a turbulent decade.
- The old U.S. economic order is on the way out.
- If China and the U.S. don’t negotiate in good faith, capital wars will intensify.
Ray Dalio, a billionaire hedge fund manager, laid out a stark vision of the U.S.-China trade war. In a recent speech at the National Committee on U.S.-China relations, Dalio warned listeners that the current trade standoff could turn into a “capital war” if the two sides can’t find a way to negotiate.
Dalio has been sounding the alarm recently. In October, he said the world faces a “scary situation” as the economy is likely to falter while facing a massive wealth inequality gap. And at a recent event, Dalio thundered that the U.S. dollar’s role as the world’s reserve currency is ending:
In my opinion, we’re near the end, in the late stages, of our reserve currency system – it’s a fiat monetary system. Not only do we have negative rates, but we’re going to have much bigger deficits … and that’s not half the story. Because the larger story is the unfunded liabilities.
This talk of a new world economic order led Ryan Smith to speculate that Dalio may be a secret bitcoin supporter.
Now Dalio is adding to this bleak outlook. In his latest speech, he suggests that China is set to overtake the U.S. as the world’s leading power. And if this transition isn’t handled carefully, it could lead to economic chaos.
U.S. Empire Peaked in the 1950s, Will Soon Be Overtaken
In Ray Dalio’s presentation, he offered the following slide showing his estimation of the relative power of various empires over the centuries:
According to Dalio’s data, the U.S. (dark blue line) became the world’s leading superpower in the early 1900s, overtaking Great Britain. America’s power peaked just after World War II. Since then, however, America’s power has declined from its…