Hedge fund businessman cautions of global financial failure

(MENAFN) Billionaire investor Ray Dalio has raised alarms about the potential for a global financial collapse, suggesting that the US is facing economic risks far beyond a typical recession. In an appearance on NBC's Meet the Press on Sunday, Dalio, the founder of Bridgewater Associates, warned that aggressive tariff policies under US President Donald Trump and the country's escalating debt could lead to a breakdown of the global financial system.

Dalio explained that the world is at a critical juncture, with significant political, economic, and geopolitical shifts that historically have triggered major crises. He cautioned that the US economy is dealing with multiple overlapping challenges, including rising debt, internal political strife, growing geopolitical tensions, and a shift in global power dynamics.

"This moment is very similar to the 1930s," Dalio stated, referring to the impact of tariffs, rising debt, and challenges to the existing global power structure. He warned that if the current issues aren’t managed properly, the situation could spiral into something worse than a recession, even leading to a breakdown of the dollar’s role in the global economy, internal political turmoil, and escalating international tensions, possibly even military conflict.

Dalio acknowledged that tariffs could help bring manufacturing back to the US and generate revenue but stressed that their implementation must be done carefully and through stable negotiations. He expressed concerns over Trump’s recent tariff moves, which he described as "very disruptive," predicting significant impacts on global efficiency and costs once the current 90-day negotiation period ends.

Goldman Sachs recently raised the probability of a US recession within the next year to 45%, following Trump's announcement of a 10% tariff on all imports and the subsequent escalation of trade tensions, particularly with China.

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