Ray Dalio Sees Echoes of the 1930s in Today’s Global Financial Crisis

Renowned investor, Ray Dalio, who is also the founder of Bridgewater Associates, has warned that the global monetary order is at risk of collapse due to unsustainable debt, trade deficits, and geopolitical tensions.

In recent X posts and interviews, Dalio described U.S. tariffs as a symptom of deeper systemic issues weakening global economic stability.

America’s Debt Crisis: Why Dalio Calls It Unsustainable  

Dalio identifies the US government’s debt, exceeding $35 trillion with a debt-to-GDP ratio of 121%, as unsustainable, caused by borrowing to support consumption.

The United States, with its massive debt profile, faces imbalances with creditors like China, which holds roughly $1 trillion in U.S. debt. Deglobalization and reduction in trust are intensifying these pressures as well. 

Also read: Ray Dalio Warns of Once-in-a-Lifetime Global Breakdown Amid Trump Tariff Debate

The recent tariffs imposed by President Trump—145% on Chinese goods, with a temporary exemption for consumer electronics like smartphones until June 2025; 25% on Canadian and Mexican imports; and up to 36% on nations like Thailand—are all presently disrupting trade, especially affecting Bitcoin mining hardware. 

Ray Dalio regards these as part of US efforts to reduce its reliance on Chinese manufacturers following the geopolitical rivalry. 

AI and Disasters: The Hidden Threats to Global Stability  

He also referred to the increasing U.S. political polarization, with divides in wealth, education, and values driving populist conflicts that weaken democratic compromise. 

On a global scale, the shift from U.S.-led multilateralism to an “America first” approach shows the end of the post-World War II order, as he commented in an NBC Meet the Press interview. 

Further escalating these issues are frequent natural disasters and technological disruptions, such as AI. Referencing historical cycles, Ray Dalio suggested in a previous X post that policies like capital controls or debt suspensions could emerge, though he acknowledged these remain speculative. 

He drew parallels to the 1930s to explain and prove the severity of current risks.

Also read: Is a U.S. Recession Coming? Prediction Markets Cross 50% Probability

Can the U.S. Act Fast Enough to Save Global Markets?  

Ray Dalio recommended studying previous and historical economic cycles to predict future developments, advocating for “hard money” assets like gold, which he endorses more strongly than Bitcoin.

Tether gold reached an all-time high in April 2025, recalling demand in times of uncertainty. Public reactions on X vary from support for Ray Dalio’s analysis to debates over its timing, with some arguing tariffs are accelerating an inevitable cycle. 

Also read: How to Prepare for a Recession: Essential Strategies for Financial Stability

Ray Dalio is calling for coordination to lower the U.S. deficit—7.5% of GDP in 2024—and address trade imbalances, warning that inaction will destabilize world markets, as outlined in his April 25 X post.