0:01 Welcome back. And joining me now is Ray
0:03 Dalio, the founder of the world's
0:05 largest hedge fund, Bridgewater
0:08 Associates. He is also the author of the
0:10 new book, How Countries Go Broke. It's
0:12 out in June. Mr. Dalio, welcome to Meet
0:14 the Press. Thank you. Good to be here.
0:17 Just call me Ray. Okay. Well, Rey, I'll
0:18 take you up on that. Thank you so much
0:20 for being here. Uh we really appreciate
0:22 your perspective. As I just said, you
0:24 did found the world's largest hedge
0:27 fund. Uh you have been in this field for
0:30 more than 50 years. It's worth pointing
0:32 out to our viewers, I think it's
0:33 important to note, you consider yourself
0:36 to be apolitical. And you say that the
0:39 tariff problem is a symptom of a much
0:41 greater problem. What do you mean by that?
0:43 that?
0:46 There's uh a financial problem. There's
0:48 an imbalance problem. There are
0:51 basically five big forces through
0:54 history that drive everything.
0:58 First, there's the money, credit,
1:02 debt, economic cycle in which there's a
1:05 building up of debt in a cyclical way
1:07 that becomes too large and we're going
1:09 to have problems. We're going to have a
1:10 government debt problem. Maybe we can
1:13 get into this. The second big force
1:17 through time is the um internal conflict
1:19 force. the left and the right,
1:22 differences in wealth and values causing
1:25 a conflict that we're seeing it changing
1:27 our political order. So the first is
1:30 changing our monetary order. The second
1:32 is changing our political order
1:34 internally. And then the third is the
1:38 great world order. The how countries
1:39 deal with each other. when there's a
1:42 rising power challenging existing power
1:44 and now we are going from
1:47 multilateralism which is largely an
1:51 American world order type of thing to a
1:53 unilateral world order in which there's
1:55 great conflict and the other two factors
1:57 all through history have been acts of
2:00 nature droughts floods and pandemics and
2:03 number four is technology technology
2:05 changing and how they are coming
2:08 together are the main forces behind this
2:11 for example there can't be imbalances
2:14 anymore in that environment do you think
2:18 that President Trump's tariffs are
2:20 exacerbating what you are describing
2:23 this complicated mix of challenges that
2:26 the world is facing uh I think it's just
2:29 a function of how well they're handled
2:32 you know it's a reality that it's a
2:35 desire to bring in tax revenue from that
2:37 it's a reality that we would like to
2:40 build manufacturing and jobs here. This
2:43 is a reality. That's how that's done.
2:46 Whether that's done in a practical way,
2:48 whether that's done in a stable way,
2:51 whether that's done with quality
2:53 negotiations in which that's a mutual
2:56 problem, or whether that's done in a
3:00 chaotic and disruptive way that produces
3:01 great conflict makes all the difference
3:03 in the world. Based on what you're
3:04 seeing right now, do you think that
3:06 these tariffs are being carried out in a
3:08 practical way or a chaotic way? I think
3:10 we'll we'll see. So far, very
3:13 disruptive. So far, very disruptive.
3:15 Right. And and so we don't know what the
3:17 numbers are, but that could be part of a
3:19 process, right? It depends where we are
3:22 at the end of the 90 days because what
3:24 was put there is like throwing rocks
3:28 into the production system and those
3:31 impacts are going would be enormous in
3:33 terms of the efficiency of the whole
3:36 world. Great cost. I want to ask you
3:38 about something that's on a lot of
3:40 people's minds. Your predictions for the
3:42 future. And I want to start with the
3:44 Rword. I know you think this is just a
3:45 piece of it. Of course, I'm talking
3:47 about a recession. Do you think it is
3:50 likely that the United States will dip
3:51 into a recession because of President
3:55 Trump's tariffs? I I think that um right
3:58 now we are at a decision makingaking
4:01 point and very close to a recession and
4:03 I'm worried about something worse than a
4:06 recession if this isn't handled well. A
4:08 recession is two negative quarters of
4:11 GDP and whether it goes slightly there.
4:14 We always have those things. We have
4:16 something that's much more profound. We
4:19 have a breaking down of the monetary
4:20 order. We are going to change the
4:23 monetary order because we cannot spend
4:25 the amounts of money. So we have that
4:27 problem. And when we talk about the
4:29 dollar and we talk about tariffs, we
4:32 have that. We are having a profound
4:35 changes in our domestic order, how
4:37 ruling is existing and we're having
4:39 profound changes in the world order.
4:42 Such times are very much like the 1930s.
4:44 I've studied history and this repeats
4:47 over and over again. So if you take
4:49 tariffs, if you take debt, if you take
4:52 the rising power challenging existing
4:54 power, if you take those factors and
4:57 look at the PA factors that those
5:00 changes in the orders, the systems are
5:03 very very disruptive. How that's handled
5:05 could produce something that is much
5:07 worse than a recession or it could be
5:09 handled well. Let's take the debt
5:11 situation. Yeah, I'm sorry. Go ahead.
5:13 Well, very very quickly because I want
5:15 to be very specific about what you mean.
5:16 You're saying worse than recession.
5:18 You're saying this is reminiscent of the
5:21 1930s. We should tell our viewers you
5:24 correctly predicted the 2008 financial
5:27 crisis. What is your prediction for
5:29 where the country is headed right now?
5:30 Right now we're at a juncture. Let's
5:31 take the
5:35 budget. It the budget deficit can be
5:38 reduced to 3% of GDP. It's about it will
5:41 be about 7% if things are not changed.
5:44 If it could be reduced to about 3% of
5:48 GDP and these trade deficits and so on
5:50 are managed in the right way. This could
5:53 all be managed very well. I believe that
5:55 members of Congress should take the
5:58 pledge what I call the 3% pledge that in
6:00 one way or another that they will get
6:02 that budget deficit down to that number.
6:04 If they don't, we're going to have a
6:08 supply demand problem for debt at the
6:09 same time as we have these other
6:11 problems. And the results of that will
6:13 be worse than a normal recession. So,
6:16 can and just to follow up on that point,
6:17 worse than a recession. You're talking
6:20 about the 1930s. What specifically are
6:22 you warning of? Are you saying that it
6:24 could be as bad as a depression? What's
6:26 your biggest fear?
6:29 The value of money. What is a storehold
6:32 of wealth? That is a bond. In other
6:34 words, one man's debt is another man's
6:37 assets, bond holders. And so, we're
6:40 going to be in a situation where if that
6:43 storehold of wealth is in jeopardy
6:45 because there's too much supply and
6:48 demand and so on, and we have a monetary
6:50 inflation, we will have great
6:53 disruptions. And that that could be like
6:55 the breakdown of monetary system 71. It
6:57 could be like 2008. It's going to be
7:00 very severe. I think it could be more
7:03 severe than those if these other matters
7:06 simultaneously occur. Imagine if we have
7:10 a downturn politically and and and
7:12 international conflict. What's worstc
7:15 case scenario that you're warning of? To
7:19 be very specific to to be very specific
7:23 the value the value of money
7:27 uh internal conflict that is not the
7:31 normal democracy as we know it. an
7:34 international conflict in a way that is
7:37 highly disruptive to the world economy
7:41 and could even be a military
7:44 conflict just as these breakdowns have
7:47 occurred before. You know, we have a new
7:50 order that began in 1945, a new monetary
7:53 order and a new geopolitical order. And
7:56 these go in cycles that can be measured.
7:58 And I worry about the breakdown of that
8:01 kind of an order particularly since it
8:03 doesn't need to happen because there are
8:05 certain things that could be done in
8:07 which this is better a better
8:09 restructuring of these debts and actions
8:11 taken. So that takes me to my next
8:12 question. You have this book how
8:15 countries go broke the big cycle. What
8:18 is the solution here? Well there are a
8:20 series of solutions but let's let's take
8:22 the most important and we have one
8:26 minute. One minute. Okay. 3% of GDP.
8:28 Bring that deficit down. It can be done
8:30 in a bipartisan way the way it was done
8:34 between 1991 and 98. I explain how that
8:36 could be done. Doing things together for
8:38 the greater good. and then
8:41 internationally on all of these issues
8:44 to um use American strength, but to
8:49 negotiate well to lay out ways in which
8:52 bad conflict and inefficient policies
8:55 don't create great disruptions but get
8:57 us through this in an orderly way. All
9:01 right, Ray Dalio, thank you so much.
9:04 Your book, How Countries Go Broke: The
9:06 Big Cycle. We really appreciate it.
9:07 Thank you so much for being here. We
9:09 really appreciate it. Thanks for
9:11 watching. Stay updated about breaking
9:14 news and top stories on the NBC News app
