Billionaire investor Ray Dalio warns U.S. is ‘on the brink’ and estimates a more than one in three chance of civil war

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Billionaire investor Ray Dalio believes the chances of a second American Civil War stand better than one out of three and is urging investors to move part of their assets out of the country.

Dalio, who founded the world’s largest hedge fund Bridgewater Associates before relinquishing control in September 2022, believes this year’s presidential election between incumbent Joe Biden and challenger Donald Trump is the most important one of his lifetime and be serve as a litmus test that determines whether risks spiral out of control.

“We are now on the brink,” he told the Financial Times in an interview published on Thursday, estimating the probability of strife erupting at somewhere between 35% to 40%. 

Civil war seemed inconceivable only a few years ago. But the Jan. 6 scenes of angry mobs sacking the Capitol—beamed into living rooms and narrated by a British ITV news team in real time—were all too reminiscent of political revolts in third world countries.

The idea of a “national divorce”, proposed last year by Congresswoman Marjorie Taylor Greene, has since been brought to the silver screen by director Alex Garland in the simply named Civil War released in April. A Rasmussen poll conducted shortly thereafter suggested 41% of likely U.S. voters believe they will experience a civil war sometime in the next five years. 

November’s election and the reactions to it will play a crucial role in determining whether the system can still heal itself—or pessimistic U.S: voters are right.

“Will there be an acceptance of the rules and an ability to work well under those rules?” the Bridgewater founder asked.

‘Best parts of the United States’ still attractive for investments

Political scientist Barbara F. Walter, author of How Civil Wars Start: And How to Stop Them, says people like Dalio can defend democracy through a more holistic approach to capitalism that pours money into communities left behind by globalization.

“Businesses can invest in better healthcare, better education and a higher minimum wage so that they create a group of people who are hopeful about the future and less vulnerable to the calls by extremists to burn the system down,” she argued in a TED talk last April. 

Dalio has a different idea, however—stay invested only in what the hedge funder called “the best parts of the United States” where innovation and capitalism still thrive, and move the rest of your money out of the country to jurisdictions that are more stable and attractive. 

“Countries that earn more than they spend and have great balance sheets, have internal order and are neutral in the geopolitical conflicts…look attractive,” said Dalio, suggesting India, Singapore, Indonesia, Malaysia, Vietnam and some Gulf states as possible destinations. 

One of those heeding a similar call is Warren Buffett, who just revealed he took a $7 billion stake in Chubb, an American insurance company that relocated its operations from the U.S. to Switzerland in 2008.

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