The USA is the most powerful country in the world. They have undoubtedly been leading the West since the end of World War II. Though often shaken by crises, the country has so far resisted all odds.
But the glory days of a superpower may end abruptly soon. At least that’s what very wealthy American hedge fund manager Ray Dalio (72) thinks. It predicts dark times for the United States.
A civil war does not seem unlikely
“The financial and political problems are now obvious. It is not hard to imagine that this would turn into a civil war “, Dalio tells” Spiegel “.
It is clear to him that another major economic crisis is lurking around the corner. Because the big problem in the US is that they spend a lot more money than they earn. No wonder the bill doesn’t add up anymore.
“For new spending, the state has to print even more money and incur even more debt, which causes more inflation and political strife,” says Dalio. So it is clear to the hedge fund manager: the United States must regain control of its finances. “There are only two ways to do this. Either the state has to increase its income or limit its spending. “
“Stan still turns on the printing press”
Dalio is not very optimistic, however. He believes that no action will be taken in the near future. “It is much more likely that the state will keep pushing for money.” Because most politicians prefer to stay away from tax increases, especially as such increases scare voters away and, according to Dalio, would further aggravate the conflicts in the country.
The manager believes that chaos also threatens the United States in politics. The next presidential election in 2024 may finally be the last straw. “I think it is likely that neither Democrats nor Republicans will accept defeat,” Dalio said.
“A Chinese would have to be stupid to screw up catching up”
These problems come at the worst possible time for the United States. Because apart from economic and political challenges, there is also China. In recent years, the country has become the US’s closest competitor to global economic domination.
For Dalio, however, it is only a matter of time before China will overtake the US and become the number one economic powerhouse. “The Chinese would have to be very stupid to screw up the catch-up race,” sums up the financial guru.
The US is shooting itself in the leg
Nevertheless, the United States will still have the means to keep China in check, at least for the time being. Sanctions play an important role in this. “The United States may try to hold back investment and do business in China,” Dalio said. According to the expert, such a strategy may work in the short term. However, in the long run, the US would shoot itself in the foot, Dalio is sure.
As number two in the world economy, China is now the most important trading partner of many countries. Not only the American but also the European economy is closely related to the Chinese one.
The situation closely resembles Dalio in 1938 and 1939, when the world was on the brink of World War II. “Two world powers stand against each other and are supported by different allies.” (cd)