Tariffs Are Just the Tip of the Iceberg, Warns Billionaire Investor Ray Dalio

Billionaire-investor Ray Dalio suggests that the market meltdown of the past week caused by the radical rate policy of President Trump reveals more than just the volatility in the short term and a flight to safety.

Dalio, who founded Bridgewater, the world’s largest hedge fund, founded by discretionary assets in the management, wrote on Monday that the world witnesses a “one -off” chaos that signals a “breakdown” of the world order.

At the end of Monday evening, Trump threatened To increase the rate on Chinese goods by another 50%. China’s Ministry of Trade respondedclaim that the country will “resolutely take countermeasures” to protect its “rights and interests”.

“Although these tariff announcements are very important developments and we all know that President Trump has caused them, most people lose the underlying circumstances that have chosen him as president and brought these rates,” Dalio written.

Dalio argues that rates are only symptoms of five underlying forces that reform the global order: rapidly increasing debts, domestic politics, a shift in how geopolitical power is exercised, acts of nature and the impact of technological innovations such as AI on the world economy.

Debt has become “untenable because of the great imbalance between debtors who owe too many debts and lenders who already have too much,” argued Dalio, referring to the relationship between China and the US

Crypto-equity correlations

While they come up, crypto markets have more and more moved Show in Lockstep with US shares sensitivity To macro -economic indicators such as inflation values ​​and decisions of central banking on tariff reductions.

Bitcoin’s dive below the $ 75,000 level less than a day ago, in combination with the broader crypto market of the fast 7% contraction of the past weekend since “Liberation day“Wise to what Dalio describes as a” classical demolition of the most important monetary, political and geopolitical orders “rather than just a response to trade policy.

Dalio argues that the “mutual connectedness” of trade and capital flows means that when the “non -sustainable debt” conditions and “demolition of international order” occur in concrete policy actions, the resulting flight to safety influences all risk companies at the same time.

In the meantime, observers note that the rise in the American treasury results in signals Reduced question For instruments for government debt and open inflatio expectations.

Yet there may be some divergence on the rise.

Bitcoin has won relative power Against the “magnificent seven” technical shares, which suggests that it can be actively disconnecting traditional risk assets in theory.

Matthew Sigel, head of Digital Assets Research at Vaneck, previously told Decrypt that while 10-year-old Treasury yields rose on Monday, Bitcoin’s response Was “especially modest”, which suggests a potential decoupling of “old macro sensitivities”.

Published by Sebastian Sinclair