Ray Dalio Cites 1930s Germany to Assess Unfolding Trade War

Dalio was speaking at a CNBC conference in Singapore on Wednesday, when he was asked what will ultimately happen as a result of the escalating conflicts over rising tariffs. 

The Bridgewater Associates founder said what the world is witnessing is an extension of the patterns of history. He cited Germany in the 1930s, saying there was writedown of debt, a hike in tariffs to drive revenue and a buildup of its domestic base. 

“Be nationalistic, be protectionist, be militaristic. That’s the way these things operate,” he said. “So I would say lessons from the past of what that looks like, and the issue is really the confrontation of all of this, the fighting of all of this.” 

Dalio stressed that he was politically neutral and that he approached these observations more like a doctor or mechanic.

“All I want to do is to try to convey the mechanics,” he said. “It’s up to others to make the choice. So I’m not an ideologue.”

He said tariffs could lead to fighting between countries, while clarifying that he wasn’t necessarily referring to military confrontation. 

“Think about the US, Canada, Mexico, China,” he told the audience. “There will be fighting and that will have consequences, and I think that’s the main thing to pay attention to.” 

He added that neutral countries will fare well, potentially benefiting from a flow of people and capital. He cited Singapore as an example, saying if it can remain neutral and keep operating the way it does, it can be a great opportunity.

“There will be a world situation that I’m concerned about,” Dalio said. “But there’s also these other worlds that get through it and are not involved.”

–With assistance from Ruth Carson.

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