Billionaire investor warns of threat to democracy

Ray Dalio, a billionaire investor renowned for his accurate predictions about global financial crises, has issued a stark warning about the potential consequences of the upcoming US presidential election. As the election draws near, with a notable debate between Kamala Harris and Donald Trump, Dalio expresses deep concern about the future of American democracy regardless of the election’s outcome.

Dalio, who founded Bridgewater Associates—the world’s largest hedge fund—has gained considerable attention for his market insights and predictions. In a recent interview, Dalio voiced his anxiety about the possibility of severe disorder in the US, which he believes could be exacerbated by the election.

“One of my biggest fears is for the stability of democracy,” Dalio said. He elaborated that his concern primarily centers around the potential reaction of the losing side, particularly if the Republicans and Donald Trump were to lose. He fears that such a scenario might lead to a refusal to accept defeat, resulting in a situation where both political extremes are unwilling to compromise, thereby escalating the conflict.

Dalio also predicts significant internal migration within the United States based on political, economic, and moral differences. He anticipates that people from states like California, New York, and New Jersey may relocate to states such as Florida and Texas. This anticipated migration, according to Dalio, will be driven not only by tax policies but also by differing values and beliefs. “There’s a big gap in values,” he said, pointing out the growing ideological divide across the country.

Drawing a historical parallel, Dalio compared the current political climate in the US to the period between 1930 and 1945, when economic crises led to the rise of totalitarian regimes in Germany, Italy, Spain, and Japan. “Back then, parliamentary systems broke down due to internal conflicts between extreme left and right factions,” he noted. Dalio suggests that contemporary issues reflect some of these historical dynamics, indicating a troubling trend toward political instability.

Dalio’s concerns about political migration are echoed by other notable figures. For instance, Elon Musk recently announced plans to move the headquarters of his companies, X and SpaceX, from California to Texas, citing new state regulations regarding gender identity in schools as a factor influencing his decision.

At 75, Dalio remains a prominent figure in finance, managing a portfolio of $124 billion at Bridgewater Associates. Despite his track record of successful market predictions—reportedly accurate about 65% of the time—Dalio remains cautious about forecasting the outcome of the upcoming election. “He who lives by the crystal ball is destined to eat ground glass,” he remarked, acknowledging the inherent uncertainty in predicting political events. However, he emphasizes that the likelihood of instability is exceptionally high.

Dalio refrains from making definitive predictions about whether Trump or Harris will win the election, choosing instead to highlight the broader implications of the election’s outcome. He concludes that while the precise result is uncertain, the probability of significant instability is high.

Dalio’s warnings reflect a broader concern about the health of democratic institutions in times of political polarization and economic uncertainty. As the US approaches this critical election, his insights serve as a reminder of the potential challenges facing American democracy and the need for careful attention to the evolving political landscape.