The USA is the most powerful country in the world. Since the end of World War II, they have undisputedly led the West. Although often shaken by crises, the country has so far defied all odds.
But the glory days of the superpower could soon come to an abrupt end. At least that’s what the very rich American hedge fund manager Ray Dalio (72) thinks. He predicts dark times for the United States.
Civil war does not seem unlikely
“The financial and political problems are already obvious. It’s not difficult to imagine that this could turn into a civil war,” says Dalio.Spiegel».
For him it is clear that the next major economic crisis is already lurking around the next corner. Because the big problem in the USA 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 take on even more debt, which causes more inflation and political disputes,” says Dalio. For the hedge fund manager it is therefore clear: the USA must get its finances under control again. “There are only two ways to do this. Either the state has to increase its income or it has to cut back on its spending.”
“The state continues to turn on the printing press”
But Dalio is not very optimistic. He thinks it is unlikely that any action will be taken in the near future. “It is much more likely that the state will continue to press the money.” Because most politicians prefer to keep their hands off tax increases, especially since such increases scare off voters and, according to Dalio, would further intensify the conflicts in the country.
The manager believes that chaos is also threatening the United States in politics. The next presidential election in 2024 could finally be the last straw. “I think it’s likely that neither the Democrats nor the Republicans will accept defeat,” said Dalio.
«Chinese would have to be stupid to screw up the catch-up»
These problems come at the worst possible time for the United States. Because in addition to the economic and political challenges, there is still China. In recent years, the country has become the USA’s closest competitor for global economic dominance.
For Dalio, however, it is only a matter of time before China overtakes the USA and becomes the number one economic power. “The Chinese would have to be very stupid to screw up the race to catch up,” says the finance guru, summing up the situation.
USA shoot themselves in the leg
Nevertheless, the US would still have the means to keep China in check, at least for the time being. Sanctions play an important role in this. “The US could try to stop investments and doing business in China,” said Dalio. According to the expert, this strategy could work in the short term. In the long term, however, the USA would shoot itself in the foot, Dalio is sure.
As number two in the world economy, China is now the most important trading partner for many countries. Not only the American, but also the European economy is closely intertwined with the Chinese.
The situation strongly reminds Dalio of 1938 and 1939, when the world was on the verge of World War II. “Two world powers are facing each other and are supported by different allies.” (ced)