Billionaire Investor Ray Dalio On Capitalism Crisis: The World Is Going To Change ‘In Shocking Ways’ In Next 5 Years

Billionaire Investor Ray Dalio On Capitalism Crisis: The World Is Going To Change ‘In Shocking Ways’ In Next 5 Years

Ray Dalio
Ray Dalio attends the Forbes 100th Anniversary Gala at Pier Sixty on Tuesday, Sept. 19, 2017, in New York. (Photo by Andy Kropa/Invision/AP)

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 could become more difficult, according to billionaire investor Ray Dalio.

Dalio predicts that mountains of debt will stunt U.S. economic growth, ordinary citizens will have fewer opportunities to get ahead financially and a global lack of trust in the U.S. dollar will help diminish purchasing power for U.S. Americans and could lower their standard of living, Marketwatch reported.

This isn’t the first time Dalio has warned U.S. leaders to take inequality seriously.

In April 2019, he published an essay on LinkedIn entitled “Why and How Capitalism Needs to Be Reformed,” urging leaders at the “top of the country” to treat the wealth and income gap as a national emergency.

Outspoken against the dangers of populism, Dalio warned, “…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 founded Bridgewater Associates, the largest hedge-fund firm in the world. He manages $140 billion and has an estimated net worth of $16.9 billion. He’s a champion of capitalism as a proven way of expanding living standards and economic growth.

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

Philanthropically, he has given more than $850 million to causes including child welfare and capacity building in China, Connecticut public education, ocean exploration and awareness, environmental protection, tech access and education, meditation, mental health and wellness and financial inclusion.

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There are three converging domestic and international problems facing the U.S. over the next five-to-10 years that could hurt us, Dalio said in a Marketwatch interview:

  • A money and credit-cycle problem (“What is the value of money? What will happen to the debt? Will the dollar retain its value? The finances of this — who is going to pay for it? How? What will work?” These are questions voters need to ask before the Nov. 3 election, Dalio said.)
  • A wealth and values-gap problem ( The wealth gap, opportunity and values gaps will have to be dealt with, 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?”) 
  • An emerging great power challenging the existing dominant power problem (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.”

The United States is a 75-year-old empire and it is exhibiting signs of decline. If you want to extend your life, there are clear things you can do, but it means doing things that you don’t want to do.

Ray Dalio, Marketwatch interview