Renowned hedge fund billionaire Ray Dalio — who famously predicted the 2008 financial crisis — is sharing alarming concerns once again about the state of play in the United States. But this time, he says, America is not only in danger of economic hardship, but war.
What did he say?
“No empire lasts forever,” he told Forbes during a recent interview. “Right now, money and credit and how it’s behaving are affecting the financial markets, it’s affecting inflation.”
The news outlet and the investor were discussing his latest book, “The Changing World Order: How and Why Nations Succeed and Fail,” out Nov. 30, when the conversation turned grim. Dalio began warning that the confluence of America’s rising debt and income disparity alongside China’s meteoric rise on the world state may soon put the U.S. in great peril.
“The last time those three things happened was in the 1930 to 1945 period,” Dalio explained. “When they happen together, it’s a very telling story.”
“Dalio believes there’s a 30% chance that the U.S. will enter into a major ‘civil-war-type’ conflict within the next five years,” Forbes reported.
The outlet noted that while other countries are facing similar challenges, America appears “especially vulnerable.”
“It’s very important that we deal with this now,” Dalio remarked. “We can have a type of civil war or international war based on how we are behaving with each other and our financial conditions.”
Dalio, the founder of the world’s largest hedge fund, reportedly drew the inferences from his newly-developed “health index,” which is featured in his new book. The system “rates around a dozen nations on 18 different factors ranging from debt burdens and economic output to military strength and innovation.”
Though the 18 factors provided a more complete picture, Dalio appears to focus in on the three elements mentioned above when making the dire prediction.
Forbes said Dalio also highlighted the U.S.’s “increased conflict and polarization due to widening wealth gaps.”
The news comes as the U.S. continues to experience the effects of soaring inflation under the Biden administration. In October, the Bureau of Labor Statistics reported that the year-over-year rise in the consumer price index had reached its highest level in over 30 years.
In the meantime, the country battles a supply chain crisis and labor shortages. The economic downturn is one reason a majority of Americans believe the U.S. is heading in the wrong direction.
All the while, China appears to be gaining on the U.S. in terms of global wealth and influence. A “national balance sheet” study published this month claimed that China has overtaken the U.S. as the wealthiest nation worldwide.