An important voice on Wall Street warns that the US slides toward an authoritarianism like the 1930s
Donald Trump signs an executive order in the Oval Office of the White House, Photo: American Photo Archive / Alamy / Profimedia Images
The billionaire who founded the largest speculative investment fund in the world, Bridgewater Associates Ray, warns that Donald Trump's America slips into a 1930s autocratic policy and states that other investors are too scared by the president to talk about this topic, reports Financial Times.
The “disappearance of wealth”, the “disappearance of values” and the collapse of confidence supplies “more extreme” policies in the US, said Ray Dalio in an interview with journalists from the Financial Times.
“I believe that what is happening now on the political and social level is analogous to what happened in the world during the period 1930–1940,” he stressed.
According to him, the intervention of the state in the private sector, such as Trump's decision for the US government to take on a 10% package of the Intel chip producer, representing the type of “powerful autocrat leadership that appeared to take control over the financial and economic situation.
The billionaire states that most investors are afraid to talk about the situation
His comments for FT marks a rare criticism of Trump from a prominent figure on Wall Street, despite the increasing concerns expressed by some investors towards the president's policies.
“I just describe the relationship -effect relationships that determine what is happening,” Dalio said. “And, by the way, in such times, most people are silent because they are afraid if they criticize,” he continued.
He, one of the most famous investors in the US, also warned the threats to the independence of the federal reserve (FED), just a few days after Trump has launched an unprecedented movement to dismiss one of his governors.
Trump has recently nominated a close ally to occupy a vacant place in the Fed Council, the US Central Bank, a crucial step in the context in which he has been returning to power for quick discounts of reference interest.
Dalio said that a politically weakened central bank, pressed to maintain low rates, “would undermine the confidence that Fed defends the value of money and would make denominated assets in less attractive dollars, which would weaken the monetary order [mondială] as we know it. “
“Increasing the disappearance of wealth and values leads to an increase in populism”
Dalio has refrained from explicitly appoint the model of the US president as authoritarian or socialist, but recalled that the levers to which he appeals are known. “Governments are increasingly taking control of what central banks and companies do,” he said.
Asked about the Intel package taken over by the Trump administration and about the export restrictions imposed on other chips such as NVIDIA and AMD, Dalio referred to his own “big cycle” concept (The Big Cycle), according to which the leaders of the country exert a greater control over the markets and the economy during big conflicts and risks.
“Traditionally, increasing the disappearance of wealth and values leads to an increase in right-wing populism and populism and irreconcilable differences, which cannot be solved through the democratic process. Thus, democracies weaken and the more autocratic leadership increases, as much of the population wants to work on the system to work on the system. Their favor, ”he explained.
