Ray Dalio Warns of Potential Civil War, Advises Moving Assets Abroad

Billionaire investor Ray Dalio warns that the likelihood of a second American Civil War is greater than one in three, urging investors to consider moving part of their assets abroad.

Photo credit: Levi Meir Clancy

Highlights

By Catholic Online (California Network)
6/19/2024 (9 months ago)

Published in U.S.

Keywords: Ray Dalio, Civil War, U.S. Election, Investment Strategy, Global Stability, Warren Buffett

Dalio, who founded Bridgewater Associates, the world's largest hedge fund, before stepping down in September 2022, asserts that this year's presidential election between incumbent Joe Biden and challenger Donald Trump is the most crucial of his lifetime. He believes it will serve as a critical test to determine whether risks will spiral out of control.

"We are now on the brink," Dalio told the Financial Times in an interview published on Thursday, estimating the probability of civil strife at between 35% to 40%.

The idea of civil war seemed far-fetched a few years ago, but the January 6 scenes of angry mobs storming the Capitol, broadcast live by a British ITV news team, were reminiscent of political revolts in third-world countries. The notion of a "national divorce," proposed last year by Congresswoman Marjorie Taylor Greene, has even been depicted in Alex Garland's film Civil War, released in April. A Rasmussen poll conducted shortly after the film's release suggested that 41% of likely U.S. voters believe a civil war could occur within the next five years.

November's election and its aftermath will play a crucial role in determining whether the system can still heal itself or if the pessimistic outlook of U.S. voters is justified.

"Will there be an acceptance of the rules and an ability to work well under those rules?" Dalio questioned.

Investing in Resilient Parts of the U.S.

Political scientist Barbara F. Walter, author of How Civil Wars Start: And How to Stop Them, argues that people like Dalio can defend democracy through a more holistic approach to capitalism, investing in communities left behind by globalization.

"Businesses can invest in better healthcare, better education, and a higher minimum wage to create a hopeful future for people and make them less vulnerable to extremist calls to burn the system down," Walter stated in a TED talk last April.

Dalio, however, advocates for a different approach. He advises staying invested in what he terms "the best parts of the United States," where innovation and capitalism thrive, while moving the rest of one's money to more stable and attractive jurisdictions.

"Countries that earn more than they spend, have great balance sheets, internal order, and are neutral in geopolitical conflicts... look attractive," Dalio said, suggesting India, Singapore, Indonesia, Malaysia, Vietnam, and some Gulf states as potential destinations.

Following similar advice is Warren Buffett, who recently disclosed a $7 billion stake in Chubb, an American insurance company that relocated its operations from the U.S. to Switzerland in 2008.