Tariffs are just the tip: Ray Dalio warns of a looming global systemic reset

Key topics:Ray Dalio warns tariffs mask deeper global systemic shiftsEconomic, political, and geopolitical orders are breaking downFocus on historical cycles to understand what comes next.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Kerry Lanaghan.In his article “Don’t Make the Mistake of Thinking That What’s Now Happening is Mostly About Tariffs“, Ray Dalio, founder of Bridgewater Associates, warns that while the current focus on tariffs and their economic impact is understandable, it distracts from deeper, systemic shifts reshaping the global order. Dalio argues that the tariffs, triggered by President Trump’s second-term policies, are symptoms of a much larger and more consequential breakdown of the monetary, political, and geopolitical systems. This upheaval occurs roughly once in a lifetime..Dalio identifies five interrelated forces at play:.Monetary/economic breakdown Excessive global debt, especially between debtor nations like the U.S. and creditor nations like China, has created unsustainable imbalances. These trade and capital imbalances are becoming untenable in a deglobalising world, threatening the current monetary system and capital markets.Domestic political breakdown Deep divisions in education, wealth, opportunity, and values have led to increasing populism, political extremism, and gridlock. As democracy weakens, autocratic tendencies rise, echoing patterns seen throughout history.Geopolitical breakdown The post-WWII US-led multilateral world order is eroding. In its place is a more fragmented, power-driven environment, exemplified by US-led trade, tech, and military confrontations.Disruptive natural events Pandemics, climate change, and other natural disasters further strain political and economic systems.Technological shifts Rapid advancements, especially in AI, are transforming economies, societies, and global power dynamics, amplifying existing tensions.Dalio urges readers not to be distracted by headline-grabbing policies like tariffs but instead focus on how these significant forces interact and evolve. The key is to understand these developments within the context of historical cycles – what he terms the “Overall Big Cycle.” This cyclical view helps identify the current stage of transformation and anticipate what might follow, including possible debt defaults, capital controls, or tax changes.He encourages policymakers, investors, and informed citizens to deeply study past periods of similar transition and engage in open, constructive dialogue. Only by doing so, he argues, can societies effectively navigate these seismic shifts.Dalio concludes by reiterating that his goal is to foster better understanding and dialogue around these fundamental forces so that better decisions can be made – for both nations and individuals..Read also:.The Ebrahim Rasool recall: What happened and why it mattersThe staggering cost of BEE: Billions lost, opportunities squanderedWorldview: Trump’s ‘reciprocal tariffs’ on Africa – SA braces for trade fallout, Lesotho hit hardest with 50% blow.(This article is a précis of a piece originally published on LinkedIn and can be read in full here.)

Tariffs are just the tip: Ray Dalio warns of a looming global systemic reset

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