Ray Dalio: “Are You PREPARED For The WORST-CASE Scenario In The World Economy?”
Ray Dalio considers the state of the world economy a failure
Hedge fund owner Ray Dalio said the global business cycle is in a "big dip" and the state of the global economy is reminiscent of the 1930s.
Speaking Thursday at the IMF-World Bank Annual Meeting in Washington DC as a moderated CNBC group, Dalio said it was too late for central banks to change anything as the economy entered a natural recession phase..
The billionaire investor said the current business cycle – «the best we can do, but it won't last forever, as this failure exists». Because of this «failure» monetary policy will not be as effective. «We have a situation where there is no way to ease monetary policy», – said Dalio.
Dalio said that as a result, fiscal policy and related government measures must be put in place in coordination with central banks. «Monetary policy will not be as effective, he said. – Imagine if you are in recession and you have less effective monetary policy, then there must be coordination. So how do you get coordination in such a political environment? Then you have to have coordination with fiscal and monetary policy in order to be able to do something, and then you have to have political coordination between the various factors of what the overall policy should be.».
Dalio also said that the world has the largest income gap since the 1930s, creating political tensions.
Ray Dalio: The Changing World Order
«In the United States, one tenth of 1% of the population has a net worth that is roughly equal to that of the bottom 90%», – he said.
Dalio told CNBC that China's new economic aggression is further proof that the world is now echoing the depression era of the last century..
«Just like in the 1930s, we have a growing force challenging the existing world power in the form of the Sino-American trade conflict.», – noticed the expert. He explained, that there are four types of war: trade wars, technology wars, currency wars and geopolitical conflicts – and they all go on in the world at the same time.