Billionaire Ray Dalio Warns We Need To Fix US Capitalism


Dalio predicts that mountains of debt will stunt U.S. economic growth and people will have fewer chances to get ahead.

Ray Dalio believes capitalism, the foundation of the U.S. economy, is not working for everyone and unless it becomes more generous and fair to more people, life is going to get worse. This isn’t the first time Dalio has warned U.S. leaders to take inequality seriously.

Dalio founded Bridgewater Associates, the largest hedge-fund firm in the world. (He has $140 billion under management and personal net worth of $16.9 billion). He’s a huge supporter of capitalism and says that it is a proven way of expanding living standards and growth.

Dalio predicts that ever rising personal debt will stunt U.S. economic growth and a global lack of trust in the U.S. dollar will help diminish purchasing power. This would mean that ordinary citizens will have fewer opportunities to get ahead financially and it could lower their standard of living.

In 2018, Dalio turned Bridgewater into a partnership and gave employees more of a stake in the firm.

Dating back to April 2019, when he published an essay, Dalio warned of the dangers of populism,, “…flaws in American capitalism have created destructive and self-reinforcing gaps in education, social mobility, assets and income — and the result could be another revolution.”

Dalio says there are three converging domestic and international problems facing the U.S. over the next five-to-10 years that could hurt us:

  1. A Credit and Spending Problem - Many people have massive amount of debt before they enter the work world. Our government are giving more and more out in stimulus. Where is it all coming from and how will it effect our currency?
  2. A Wealth and Values Gap Problem - Dalio said. “Are we going to be at each other’s throats in a way that is harmful or are we going to be working together even if things get worse?”
  3. An Emerging Power Trying To Test The World Order - China is rising to challenge the existing power of the U.S. “Will this be well handled?” Dalio asked. 

“The world is going to change in the next five years in shocking ways in relation to the three big issues,” Dalio predicted.

The last time those three things existed as they do now was the 1930 to 1945 period, Dalio said. “That’s the last time you had zero interest rates and money printing. That’s the last time you had the wealth and political gaps as large as they are today, and it was the last time you had rising powers challenging the existing world order.”

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Economics, Finance and Investing