Ray Dalio is warning of a potential breakdown of the global order in 2025, fueled by unsustainable economic fundamentals and escalating trade tensions. He points to President Trump's tariff policies as a significant factor, causing companies to reduce their reliance on the US and seek alternative trade routes.
Dalio suggests that the US risks being bypassed as nations form new alliances and trade networks, potentially relying on alternative currencies. He criticizes the US's debt-fueled consumption model, questioning its long-term viability. Dalio advises investors and policymakers to shift their focus from short-term market fluctuations to address these fundamental shifts in the global landscape.
Dalio's concerns are echoed by other analysts, who point to excessive debt burdens, domestic political fragmentation, shifting geopolitical dynamics, natural disasters, and disruptive technologies like AI as converging forces reshaping the global economy. These factors, combined with trade imbalances and rising tariffs, could lead to significant disruptions and a potential economic crisis in 2025.