Hedge fund veteran Ray Dalio believes that in the next 5 years the world will change as we never expected: huge debt, which pulls economic development down, less financial opportunities for citizens, the global lack of confidence in the US dollar, which is declining the purchasing power of consumers and their standard of living.
Dalio is the founder of the largest hedge fund company, which actually turned him into a billionaire. It is therefore not surprising that it celebrates capitalism as a tried and tested way of economic growth and rising living standards. He says, “Capitalism and capitalists are good at raising and creating productivity to increase the economic share.” all. One of the disadvantages of capitalism is that it creates large gaps between different classes, and this creates a huge difference in development opportunities for each other. This threatens the system, which is key to the economic health and success of US businesses, workers, government and investors.
Dalio’s opening to what are the local and international issues that weigh on US development for the next 5 to 10 years? :
I look at these problems mechanically as the doctor treats a disease. There are three main problems that go together, so it is important to understand them separately.
There is a monetary and credit problem, a problem with the difference between wealth and real value, a problem with emerging markets and their already dominant ones. What lies ahead for the United States is an economic downturn, accompanied by the great difference in wealth and growing power of China that challenges the United States. There is also a decrease in competitive advantages, such as education. The United States has lost its educational advantage over other countries.
The United States still has an advantage in innovation and technology, but China is also a strong competitor and can surpass the United States even with its current interest rates. Currency printing creates more and more debt for the US and is once again entering this vicious cycle of credit.
For the next 5 years, the dollar may have no value and we may not be able to buy anything with it. Foreign banks that borrow US money will not want to do it anymore. At present, Americans spend more than they earn, and their standard of living is determined by their spending. If the United States continues to lose its ability to save, or at least spend, to match revenue or increase productivity, it will soon lose its right to borrow and have to cut spending, and that will be painful, believe me.
Junior Trader Kameliya Ivanova