Renowned investor and founder of Bridgewater Associates, Ray Dalio, has issued a stark warning about the potential for chaos in the upcoming US election. Dalio fears that the loser, particularly Donald Trump, might refuse to concede, leading to a highly contentious and potentially destabilizing situation. This, he believes, could further escalate the already deep-rooted political polarization in the US.
In a recent interview with the BBC, Dalio highlighted a concerning trend: the migration of individuals from states like California, New York, and New Jersey to states like Florida and Texas. He attributes this trend to a combination of tax considerations and a desire to live in environments that align with their values.
Dalio’s anxieties run deeper than just the election outcome. Earlier this year, he told the Financial Times that the probability of a civil conflict in the US could be as high as 40%. While he clarifies that this conflict wouldn’t necessarily involve physical violence, it would involve a heightened level of political polarization. In this scenario, individuals would choose to live in states that better reflect their ideologies and effectively ignore federal decisions made by opposing political factions.
During the televised debate between Kamala Harris and Donald Trump, Dalio expressed his profound concern for the future of democracy, regardless of the election’s outcome. Drawing parallels to the period between 1930 and 1945, he noted that economic crises often led to the decline of democracies and their transformation into dictatorships.
He pointed to Germany, Italy, Spain, and Japan as examples of countries where internal conflicts among various political factions led to the breakdown of their parliamentary systems. He believes that similar trends are emerging in the US today.
Dalio’s concerns are mirrored in a December Gallup survey, which revealed that only 28% of US adults are satisfied with how democracy functions in the country, marking a new low. Satisfaction levels vary significantly along party lines, with 38% of Democrats and just 17% of Republicans expressing contentment.
While Dalio acknowledges the uncertainty surrounding the upcoming election, he emphasizes the high probability of instability. This sentiment is underscored by recent events, such as Elon Musk’s decision to relocate the headquarters of his companies, X and SpaceX, from California to Texas. Musk cited California’s new regulations regarding gender identity in schools as a key factor in his move.
Dalio’s track record adds weight to his warnings. He told the BBC that he has been correct in his market predictions about 65% of the time.
His concerns about the state of American democracy are amplified by the increasing trend of people migrating based on their personal values, as predicted by Dalio. This situation raises significant questions about the future of the US and its democratic institutions.
