Ray Dalio: trade wars lead to conflict

Sara Eisen: Is a trade war healthy? [...]  Where does the trade tensions and tariffs ratcheting it up fit, whether it's the external order of what do you think will ultimately happen as a result of all of this?

Ray Dalio: It's just an extension of the patterns of history.  So for example, if you looked at European countries in the '30s, like Germany in the '30s and taking economic policy, there was write down the debts, create tariff revenue because you can get a lot of money from tariff revenue, then build up your domestic [industry] - be nationalist, be protectionistic, be militaristic.  That is the way these things operate.

So I would say lessons from the past of what that looks like.  And the issue is really the confrontation of all of this, the fighting of all of this.  So tariffs are going to cause fighting between countries.  What kind of fighting?  Maybe military, I'm not necessarily talking military, but think about U.S., Canada, Mexico, China and all of those types of fighting.  There will be fighting and that will have consequences.  And I think that's the main thing to pay attention to.

Sara Eisen: Do you worry about what it will do to the global economy... as a result of all the trade barriers?

Ray Dalio: Of course.  I worry about the global economy and the global well being... but I also should emphasize that in history you can see that there are the major countries [involved in the conflict] and then there are the neutral countries.  And the neutral countries do extremely well during these periods of time.  They get people and capital that go to them, they are able to navigate in a certain way.  The making of great prosperity, it doesn't effect the whole world; there are beneficiaries of this, too.  Like Singapore, if it remains a neutral country - and that's a very difficult thing to do - and it operates this way, it becomes great opportunities.

~ Ray Dalio, "Ray Dalio and Salesforce’s Benioff on AI, trade wars and new world order," CNBC International Live, 18:40 mark, March 14, 2025

Ray Dalio on the U.S. debt problem

Ray Dalio: I think the first thing is the debt issue.  We have a very severe supply-demand problem so that they have to sell a quantity of debt that the world is not going to want to buy.  And that's a set of circumstances that is imminent.  That's of paramount importance.  The deficit must go from what will be projected now to be about 7.2% of GDP to 3% of GDP, otherwise there will be a supply-demand problem.  That's a big deal.  You are going to see shocking developments in terms of how that's going to be dealt with, things that may not have happened in our lifetimes, but things that have happened throughout history...

Sara Eisen: What do you mean, austerity?

Ray Dalio: There may be restructurings of debt.  There may be exerting pressures on countries who own the debt, to buy the debt, political pressures on countries.  There may be cutting the payments to some creditor countries for political reasons and so on.  So there may be monetizations of debt.  If you look at history and see the repeating of "What do countries do when they're in this situation?"  There are lessons from history that repeat.  It's correct

~ Ray Dalio, "Ray Dalio and Salesforce’s Benioff on AI, trade wars and new world order," CNBC International Live, 12:00 mark, March 14, 2025

Ray Dalio: "Investing in bonds has become stupid"

The economics of investing in bonds (and most financial assets) has become stupid...  Rather than get paid less than inflation why not instead buy stuff — any stuff — that will equal inflation or better?

~ Ray Dalio, "Investing in bonds has ‘become stupid,’ Ray Dalio says. Here’s what he recommends instead," MarketWatch, March 17, 2021

Ray Dalio on the 2020 election

If I was to take both parties we’ll have large deficits and monetization.  Both parties will have an aggressive China policy, I think.  But one party will be more capitalist and let’s say favor asset holders. One will be more left and favor redistribution.  

[Capitalists] understand productivity and so on, but they don’t know how to divide the pie that well.  And socialists or those that are more of the left have a problem producing as much the increase in productivity. 

~ Ray Dalio, "Why billionaire investor Ray Dalio hates cash and bonds, and says the election won’t change his view on the economy," MarketWatch.com, by Steve Goldstein, October 28, 2020

Ray Dalio's performance lags his popularity

The biggest hedge fund in the macro game, a $40 billion beast, is looking a lot like an also-ran.

It’s lagged behind peers over the past eight years, and a roughly 2% decline in 2019 is shaping up to be one of its worst years on record, according to people familiar with its performance. Yet the behemoth, Pure Alpha II, is the flagship of none other than billionaire investor Ray Dalio.

That’s right, Ray Dalio -- founder of Bridgewater Associates and, to his many admirers on and off Wall Street, celebrated author of “Principles,” his 600-page manifesto for success that has sold 2.2 million copies since its publication in September 2017. The tome, an unlikely crossover hit that’s been praised by celebrities from Bill Gates to Sean “Diddy” Combs, was recently turned into an illustrated version for kids.

~ Financial Adviser, "Ray Dalio is More Famous Than Ever and Delivering Subpar Returns," December 4, 2019

Ray Dalio: "These big declines are just minor corrections"

What we are seeing is typical late-cycle behavior, though more exaggerated because the durations of investment assets (i.e., their sensitivities to interest rate changes) are greater.  We've just had a taste of what the tightening will be like.  Fiscal stimulation is hitting the gas, which is driving the economy forward into the capacity constraints, which is triggering interest rate increases that are hitting the brakes, first in the markets and later in the economy.   This is happening sooner than we expected.  This confluence of circumstances will make it difficult for the Fed to get monetary policy exactly right.  Still, these big declines are just minor corrections in the scope of things, there is a lot of cash on the side to buy on the break, and what comes next will be most important.

~ Ray Dalio, founder and co-Chief Investment Officer, Bridgewater Associates, world's largest hedge fund with $160 bil AUM, interview on CNBC, January 5, 2018

Ray Dalio from Davos: "If you're holding cash, you're going to feel pretty stupid." (2018)

We are in this Goldilocks period right now where we have had this beautiful deleveraging.  Inflation isn't a problem.  Growth is good, everything is pretty good with a big jolt of stimulation coming from changes in tax laws.

[...]

There is a lot of cash on the sidelines...  We're going to be inundated with cash.  If you're holding cash, you're going to feel pretty stupid.

[...]

You can't have a significant rise in interest rates without knocking over the whole asset markets.  The Fed is going to determine what the level of real interest rates are.

~ Ray Dalio, founder, Bridgewater Associates, CNBC interview from Davos, 2018 World Economic Forum, January 23, 2018

Ray Dalio on confirmation bias

I think most people, too often, they start with an opinion.  There are psychological tests that show that people start with an opinion and filter information that comes to them to be consistent with their opinion.

~ Ray Dalio, founder of Bridgewater Associates ($160 bil hedge fund), interview with Tim Ferris, September 13, 2017