Ray Dalio names the top five forces shaping the world economy

SINGAPORE – American billionaire Ray Dalio has named five front-line forces and the center of the world economy.

Speaking at the Milken Institute’s Asia Conference in Singapore, the founder of Bridgewater Associates said these five factors are interrelated and often revolve around each other. Dalio made his remarks Wednesday ahead of the US Federal Reserve’s interest rate decision.

With uncertainty surrounding what the Fed will do at its meeting this week, Dalio raised concerns about how the national debt will be managed.

“We’re going to have a Fed interest rate hike, and [what will] all that power? What happens to all the debts? How will that be handled?” he asked himself.

The U.S. central bank kept interest rates at the highest level in 23 years, which led to the government issuing $1.049 trillion for debt services – a 30% increase compared to last year . This is part of an expected total of $1.158 trillion in payments for the entire year.

“What is its benefit and is it someone else’s debt or someone else’s property? How is it similar to wealth? These are important questions that are pressing questions,” he threw the question to be who attended the meeting.

“The second issue is the issue of internal control and confusion,” Dalio said, referring to US politics ahead of the election.

“There are irreconcilable differences between the right and the left, which are driven by great wealth and quality gaps… and question even the orderly transition of power,” he added.

For the first time in the 2024 election cycle, Vice President Kamala Harris is now considered more likely to win than former President Donald Trump, a CNBC Fed poll released Tuesday.

Last week, candidates debated issues ranging from abortion rights to bills and other policy proposals.

However, regardless of who occupies the White House, the president’s policy has little impact on the health of the American economy.

Dalio cited geopolitics as his third concern: the relationship between the US and China.

The US-China relationship has been characterized by many ongoing disputes, such as territorial issues in the South China Sea, the political situation in Taiwan and economic tariffs.

“I think that maybe, there is a fear of a war that will stand on the way – the destruction guaranteed to both. But it is a confusion,” he stressed later, without mentioning the specific location of the fire.

Dalio said that “acts of nature” in history have posed a greater threat to people and nations than war.

“Natural acts, droughts, floods and epidemics have killed many people and are responsible for many domestic orders and changes in international orders,” Dalio noted.

And the costs of climate change are about to increase, he stressed. According to the World Economic Forum, the climate crisis causes a loss of 12% in global GDP for every 1 °C increase in temperature.

Technology will be “fun” if people can adopt it and invest in it properly, said the billionaire.

“The potential benefits of that are huge,” he said, explaining that technology creates unicorn companies, and when it does – the population does better.

He continued: “Whoever wins the technological war will win the military war.”

Examining the five factors in total, Dalio concluded that “miracles are much lower than they are high,” he said.