'Hedge Fund Guru' Dalio: "It's Already Too Late for Tariff Policy Turmoil to Subside"

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Warning of Imminent Collapse of U.S. Monetary and Political Order
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Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund, stated that it is already too late for the turmoil triggered by the Trump administration's tariff policies to subside, diagnosing that the global economic order centered on the United States is collapsing.

Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund.

On April 28 (local time), one day before the 100th day of the Trump administration, Dalio wrote on the social networking service LinkedIn, "Some people believe that if negotiations are conducted and more ideas are provided to structure tariffs so that they work reasonably, the tariff turmoil will calm down. However, many of those who have to deal with this issue say it is too late, and that number is steadily increasing."

He explained that those involved in transactions and investments between the United States and foreign countries are now in a situation where they must prepare alternatives regardless of the outcome of future trade negotiations, stating, "They recognize that the rapid decrease in interdependence with the United States is now a reality that must be addressed."

Dalio continued, "The perception that the role of the United States as both the world's largest consumer of manufactured goods and the largest producer of debt assets (bonds) is unsustainable is spreading. It is naive to assume that after selling goods to and lending money to the United States, one will be repaid in the future with a strong (non-depreciated) dollar. Therefore, these parties must make other plans."

Recently, as concerns about the U.S. medium- and long-term economy have spread, foreign investors have been pulling out of dollar-denominated assets and U.S. Treasury bonds. On April 21, the U.S. financial market experienced a triple decline, with stocks, Treasuries, and the dollar all plunging simultaneously.

He warned, "We now appear to be on the verge of the collapse of the (dollar-based) monetary order, the (U.S.) domestic political order, and the international order."

He also expressed concern that many countries around the world are at increasing risk of being pushed aside by nations that are adapting to separation from the United States and forming new 'synapses' (connection points between nerve cells) in their surroundings.

Dalio further emphasized the need for a policy shift to reduce the fiscal deficit to about 3% of gross domestic product (GDP).

Dalio, considered one of the "gurus of Wall Street," founded Bridgewater in 1975 and grew it into the world's largest hedge fund. He gained fame for predicting the 2008 global financial crisis in advance.