Billionaire says US on ‘classic path’ to civil war
The founder of the world’s largest hedge fund Bridgewater Associates, Ray Dalio, has warned on Thursday that the US is on a “classic path” toward “some form” of a civil war.
The current financial conditions and irreconcilable differences in desires and values are consistent with the ingredients leading to civil strife, according to him.
“Not knowing what is true because of distortions in the media and propaganda increases as people become more polarized, emotional, and politically motivated,” Dalio wrote on LinkedIn.
He pointed to a number of factors that led him to this notion, including large deficits, high taxes, inflation, and wealth disparity that bring about political polarization.
“When that happens at the same time as there are foreign powers that are becoming strong enough to challenge the leading world power that is encountering this civil war dynamic, it is an especially risky period. That is the period I believe we are now in,” Dalio stressed, adding that “the biggest question is how much the system will bend before it breaks.”
He noted that political powers from opposing sides are “fighting to win at all costs,” making it impossible to compromise and leaving many “too afraid” to speak up or run for public office.
“History shows that the biggest risk to democracies is that they produce such fragmented and antagonistic decision-making that they are ineffective and disorderly, which leads to bad results and revolutions.”
Dalio predicts that this year’s elections will become the turning point for US internal politics.
“In the 2022 elections we will see losses by moderates and gains by extremists/populists […] because each side wants fighters not compromisers. The Supreme Court will make decisions on contentious issues that people are willing to fight over. There is a big risk that each side will view the decisions as unfairly made by the other side and not accept them, which will lead to tests of power,” he predicts.
This is not the first time Dalio voiced such dire forecasts. In November last year he published a book ‘Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail’, where he also warned of a “dangerously high risk” of a civil war in the US within the next 10 years due to the “exceptional amount of polarization.”
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