For billionaire Ray Dalio, China and the US are close to a direct war

Billionaire Ray Dalio
Ray Dalio, Bridgewater's co-chairman and co-chief investment officer, speaks during the Skybridge Capital SALT New York 2021 conference in New York City, U.S., September 15, 2021. REUTERS/Brendan McDermid

In a panel held last Monday (12) by Forbes, billionaire investor Ray Dalio gave a bombastic comment. For him, China and the United States are on the verge of a direct confrontation due to Taiwan’s independence. 

Dalio maintains that geopolitical tensions, at the current point, are beyond diplomatic avenues of resolution.

“The relative position [in the world] of the United States has fallen, while that of China has risen. I’m not saying the Chinese will beat the Americans, but they will be comparable forces in a conflict, and those conflicts are multidimensional.”

According to the billionaire, who served as director of the largest hedge fund in the world, China is one of the three biggest risk factors for the United States today. In addition to the eastern country, Americans face “enormous” internal problems, such as rising public debt and growing inequality.

In Dalio’s view, these factors contribute to the creation of populist forces within the country. “A populist is an individual who does not know how to lose”, put the billionaire, without mentioning any specific leader.

China’s domination is a new seismic shock

An aficionado of historical cycles, Ray Dalio notes that the knowledge he gained from other economic crises in the past was essential for him to protect the hedge fund from the last crisis. “It was by studying the period from 1920 to 1945 that I was able to understand the nature of the 2008 Crisis”.

Now, he looks to the replays of history to warn of a new shift in the global power structure. The billionaire understands that the geopolitical order created after the Second World War, which has the United States as its dominant pole, will not last forever.

In this respect, the difference in opportunities, and the country’s skyrocketing indebtedness in relation to foreign creditors, could accelerate this handover, which has everything to be traumatic.