Ray Dalio is a world - class investor and entrepreneur, as well as the founder of Bridgewater Associates, the world's largest hedge fund. He has been included in "The World's 100 Most Influential People" by a well - known magazine. His book "Principles: Navigating Big Debt Crises" is widely acclaimed.
As a long - term witness of China's development, Dalio has always been optimistic about the prospects of the Chinese market. In 2021, the management scale of Bridgewater's private fund in China exceeded 10 billion, making it the largest foreign - funded private fund manager in the country. In March this year, Dalio attended a high - level forum on China's development. Earlier this month, he visited China again, continuously deepening his interaction with the Chinese market.
"We are witnessing a textbook - level collapse: the collapse of the monetary system, the political landscape, and the world order. A collapse of this magnitude may only be experienced once in an ordinary person's lifetime."
Dalio recently published an article stating that the market avalanche triggered by the full - scale tariff hikes last week by a certain government has a deeper meaning far beyond the surface phenomenon of stock market turmoil. The article vividly shows the possible impacts of the tariff policy:
It will trigger turmoil in the monetary/market and economic order.
The domestic political order of a certain country will be affected, and the support rate of its leader may decline.
The international geopolitical order will be affected because tariffs will spread to global financial, political and other fields.
Dalio emphasized in the article that we are witnessing a textbook - level collapse: the collapse of the monetary system, the political landscape, and the world order. A collapse of this magnitude may only be experienced once in an ordinary person's lifetime. However, in history, whenever similar unsustainable situations accumulate to a critical point, the same scenario will be repeated.
Collapse of the monetary/economic order
Dalio said that the current monetary and economic system is disintegrating. The root cause lies in the excessive scale and rapid growth of debt, and the existing capital markets and economies are built on this unsustainable high - debt basis.
In the era of de - globalization, debtor countries are worried about being cut off from the supply of key materials, and creditor countries are worried that their claims cannot be cashed. The double imbalance of trade and capital is obviously irreconcilable, which is clearly unreasonable. This "war - like state" that prioritizes self - sufficiency has repeatedly led to crises similar to today's in history.
The model where a certain country's manufacturing industry is hollowed out and relies on its strategic opponents for the supply of key materials is accelerating its collapse with the ebb of globalization. He said that the monetary system is about to undergo a major change.
Collapse of the domestic political order
Dalio said that the root cause of the collapse of the domestic political order lies in the huge gaps among the people in education, opportunities, productivity, income, wealth and values, and the existing political system is helpless in the face of this.
He said that the game between the left - wing and right - wing populist forces in a certain country is destroying its democratic system. After all, democracy requires compromise and respect for the rule of law, and these two are most likely to collapse in a crisis like this. Even worse, the current political chaos will intensify problems such as financial market turmoil and economic crisis.
Collapse of the international geopolitical order
Dalio said bluntly that the era when a certain country dominated the world unilaterally has ended. However, what replaces the multilateral cooperation system is not a new order, but unilateralism of "might makes right". Although a certain country is still the world's most powerful country, its "America First" policy is accelerating the disintegration of the existing international geopolitical order through trade wars, technological blockades, geopolitical pressure and even military intervention.
Dalio pointed out at the end of the article that the current tariff war is just another重演 of history. History shows that the collapse of the monetary, political and geopolitical orders often triggers economic crises or conflicts, which in turn give birth to a new order, and this cycle repeats. This law is the key to understanding today's changes.
