The founder of the billionaire of hedge funds, Ray Dalio, believes that the recent collapse of cryptography and the market, triggered by the new aggressive tariff policies of President Donald Trump, underlines a much more serious dismantling of the global financial order than many do not think.
In a statement published on Monday, Dalio, who founded Bridgewater Associates, the largest coverage fund in the world, described chaos on the current market as a “unique” event which reports a broader systemic break.
He said that President Trump’s radical rates, especially against China, are much deeper long -term symptoms of long -term for the world.
Trump threatens a 50% price increase on China; Beijing comes from quick reprisals
Late Monday, Trump threatened to increase prices on Chinese imports by an additional 50%, which caused a rapid response from the Chinese Ministry of Commerce, which promised to “resolutely take countermeasures” to protect its economic interests.
While recognizing the role of Trump in the outbreak of current volatility, Dalio stressed that the real causes are deeper.
“Most people lose sight of the underlying circumstances that made him elected president and caused these prices,” he wrote.
According to Dalio, chaos is motivated by five structural forces: unsustainable debt levels, internal political divisions, the evolution of geopolitical dynamics, environmental pressures and technological disturbances, in particular artificial intelligence.
He highlighted the deterioration of the dynamics of American-Chinese debt as an example of the way in which global financial imbalances have become untenable.
“The debt has become unbearable due to the great imbalance between the debiters of the debtor who owes too much and the lending creators who already hold too much,” said Dalio.
Cryptographic markets, formerly considered disconnected from traditional finance, recently reflected the volatility of American actions.
Bitcoin fell below $ 75,000 during the sale of the weekend, while the wider market of cryptography fell by 7%.
Dalio considers this decision to indicate the broader collapse of existing monetary, political and geopolitical frameworks.
He noted that the interconnection of global trade and capital flows means that shocks in a field are now aired through all risk assets.
While confidence is crumbling, investors flee simultaneously, creating cascade effects on the markets.
Could the devaluation of the China Yuan trigger a Bitcoin Bull Run race? Hayes think so
Meanwhile, the founder of Bitmex, Arthur Hayes, argued that China’s response to American prices – in particular a potential devaluation of the Yuan – could ignite a new wave of capital flight to Bitcoin.
As many parallels in previous years as 2013 and 2015, Hayes argued that similar economic conditions have led Chinese investors to turn to BTC as a coverage against the depreciation of currencies.
As indicated, the cryptocurrency markets were faced with a brutal correction on what is nicknamed “Black Monday”, with total liquidations exceeding $ 1.36 billion during the day.
The crypto was not alone in the sale. US stock contracts also plunged on Sunday evening, strengthening fears of a wider market accident.
The term contracts on S&P 500 fell by 5.98%, the term contracts on the NASDAQ 100 slipped by 6.2%and the term contracts on DOW dropped by 5.5%, all pointing to a chaotic start to the week of negotiation.
The eminent hedge fund manager and Trump’s supporter, Bill Ackman, publicly urged the administration to suspend the climbing of prices for 90 days, warning that the current trajectory could trigger an “economic nuclear winter”.
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