The main point of prices does not concern prices, says Ray Dalio

Dalio has a new message for people: don’t think the prices are about prices.

For several years, the founder of Bridgewater Associates has expressed its evaluation according to which the rules of the global economy and the geopolitical arena have systematically disintegrated. He published a book on the subject in 2021.

In an article on Tuesday on social networks, Dalio wrote that people should also focus on the underlying factors that have led to the election of President Donald Trump and his new import taxes.

“The much greater and more important thing to keep in mind is that we see a classic break in the main monetary, political and geopolitical orders,” he wrote. “This type of breakdown only occurs once in a life, but they have occurred several times in history when non -sustainable similar conditions were in place.”

The billionaire has highlighted three major forces at stake: the unsustainable debt relations in America, the enlargement of the gaps of wealth and education undermining democracy in the United States and the Washington “America First” approach.

Dalio on debt

The first point concerns the way in which the American markets are built on debt by buying and borrowing from countries that can manufacture cheaper products, such as China. But many industries have gone too far and have become “hung on debt,” wrote Dalio, a phenomenon that he previously warned that it would end up inducing a “heart attack” on the American economy.

The United States debt / GDP ratio was 121% in the last quarter of 2024, compared to 64% in 2008.

“Obviously, the monetary order will have to change major disruptive ways to reduce all these imbalances and excess, and we are at the start of the change process,” Dalio wrote in his article.

The hedges fuel added that the decline in confidence between the United States and manufacturing countries like China increased pressure for a radical change in the system.

“Anyone who has studied history knows that such risks in such circumstances have repeatedly led to the same types of problems we see now,” Dalio wrote.

Dalio on democracy at home

Dalio has also warned that democracies decompose due to “gaps” in education, opportunity, productivity and wealth. This trend includes the United States, he wrote.

“These conditions are manifested in the Win-At-All-Cost battles between the populists of the right and the populists of the left on which side will have power and control to manage things,” he wrote.

The billionaire also warned that these conditions had historically led to the rise of strong autocratic leaders and to the decline of the rule of law.

Dalio on the world order

“The era of dominant power (the United States) which dictates the order that other countries follow is over,” wrote Dalio.

This is part of the long-standing description of the United States billionaire as a “empire” which has a great influence on the rest of the world since the end of the Second World War.

Dalio has often said that this relationship with the world is part of a large cycle which must naturally end.

Trump’s “America First” approach marks this transition, he wrote in his article.

“The multilateral and cooperative world order that the United States has been replaced by a unilateral and electricity approach,” he continued.

Dalio also wrote that artificial intelligence and natural disasters such as floods and pandemics are elements that change the situation in the future of the world.

The billionaire has urged people to study how countries acted at similar moments in history, in particular by imposing prices and suspending debt payments on other countries.

“Many of these things would have been unimaginable not long ago, so we must also study the functioning of these policies,” he wrote.

A Dalio representative did not respond to a request for comments sent outside regular work hours by Business Insider.