Ray Dalio Warns of a Shifting Global Order Amid Trade and Debt Imbalances
Ray Dalio, founder of Bridgewater Associates, has issued a sobering assessment of the current global economic and political environment.
He warns that the world is moving toward a major realignment, driven by unsustainable trade and capital imbalances, rising deglobalization, and deteriorating relations between major powers.
Dalio notes that many exporters and importers are already reducing their dealings with the United States, recognizing that tariff disputes and broader tensions are unlikely to fully resolve. Companies and investors from both the U.S. and China, and those who rely on their trade relations, are making alternative plans to reduce interdependence. This trend, once limited to U.S.-China relations, is now affecting global markets, capital flows, and even military alliances.
The Unsustainability of U.S. Consumption and Debt
According to Dalio, the United States’ role as the world’s largest consumer of goods and issuer of debt is increasingly seen as unsustainable. Relying on the assumption that U.S. debt will always be repaid in stable dollars is, he argues, “naive thinking.” As imbalances grow and deglobalization spreads, the risks of financial disruption intensify.
Drawing from historical patterns, Dalio believes that the global monetary system, domestic politics, and international relations are nearing a breaking point. He warns that other countries are already preparing to bypass the United States by forming new economic and political connections.
A Call for Calm and Cooperative Solutions
However, Dalio remains hopeful that with calm, analytical policymaking, these transitions can be managed constructively. He advocates for cooperative rebalancing strategies, like the “3-Part, 3-Percent Solution” outlined in his latest book How Countries Go Broke: The Big Cycle. Yet he also cautions that the current path of conflict and volatility risks irreversible consequences.
Dalio urges investors, policymakers, and leaders to focus on the underlying shifts rather than short-term market movements, stressing the need for thoughtful, coordinated responses to these historic changes.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
