Ray Dalio says world war will linger, markets misprice
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- Ray Dalio posted on X on Tuesday warning that the current geopolitical landscape amounts to a “world war” of interrelated conflicts, citing the Iran‑US and Russia‑Ukraine wars involving nuclear powers.
- Ray Dalio cautioned that markets are short‑term focused, pricing in a quick end to the war, while he says the conflict is in its early stages and will not end soon.
- Ray Dalio outlined that global alliances show China aligned with Russia, and Russia aligned with Iran, North Korea, and Cuba, opposing the United States, Ukraine, Israel, GCC states, Japan, and Australia.
- Ray Dalio linked the current turmoil to a “Big Cycle” transition from a pre‑fighting to a fighting stage, comparable to the 1913‑14 and 1938‑39 periods.
- Ray Dalio argued that a country’s ability to endure prolonged pain, rather than raw power, determines who will prevail, describing the United States as the most powerful but also the most overextended and weakest at withstanding long‑term pain.
Why it matters: Dalio’s warning suggests that investors are under‑pricing the duration and systemic risk of the intertwined wars, meaning those who adjust exposure now could avoid losses, while those who stay complacent risk significant portfolio drawdowns as the conflict persists and could trigger broader market volatility.
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