Don't Think That What's Now Happening Is Mostly About Tariffs | Ray Dalio

At this moment, a huge amount of attention is being justifiably paid to the announced tariffs and their very big impacts on markets and economies while very little attention is being paid to the circumstances that caused them and the biggest disruptions that are likely still ahead. 

 

Don't get me wrong, while these tariff announcements are very important developments and we all know that President Trump caused them, most people are losing sight of the underlying circumstances that got him elected president and brought these tariffs about. They are also mostly overlooking the vastly more important forces that are driving just about everything, including the tariffs.  

 The 80 Year Big Debt Cycle.

The far bigger, far more important thing to keep in mind is that we are seeing a classic breakdown of the major monetary, political, and geopolitical orders. This sort of breakdown occurs only about once in a lifetime, but they have happened many times in history when similar unsustainable conditions were in place. More specifically:

 

1. The monetary/economic order is breaking down because there is too much existing debt, the rates of adding to it are too fast, and existing capital markets and economies are supported by this unsustainably large debt. The debt is unsustainable because the of the large imbalance between a) debtor-borrowers who owe too much debt and are taking on too much debt because they are hooked on debt to finance their excesses (e.g., the United States) and b) lender-creditors (like China) who already hold too much of the debt and are hooked on selling their goods to the borrower-debtors (like the United States) to sustain their economies. 

 

» We are seeing a classic breakdown of the major monetary, political, and geopolitical orders. « 

There are big pressures for these imbalances to be corrected one way or another and doing so will change the monetary order in major ways. For example, it is obviously incongruous to have both large trade imbalances and large capital imbalances in a deglobalizing world in which the major players can't trust that the other major players won't cut them off from the items they need (which is an American worry) or pay them the money they are owed (which is a Chinese worry). This is a result of these parties being in a type of war in which self-sufficiency is of paramount importance. Anyone who has studied history knows that such risks under such circumstances have repeatedly led to the same sorts of problems we're seeing now. 

 

So, the old monetary/economic order in which countries like China manufacture inexpensively, sell to Americans, and acquire American debt assets, and Americans borrow money from countries like China to make those purchases and build up huge debt liabilities will have to change. These obviously unsustainable circumstances are made even more so by the fact that they have led to American manufacturing deteriorating, which both hollows out middle class jobs in the US and requires America to import needed items from a country that it is increasingly seeing as an enemy. In an era of deglobalization, these big trade and capital imbalances, which reflect trade and capital interconnectedness, will have to shrink one way or another. 

 

  From Trade War to Financial War.

Chinese Embassy in the US, April 11, 2025.

Also, it should be obvious that the US government debt level and the rate at which the government debt is being added to is unsustainable. (You can find my analysis of this in my new book How Countries Go Broke: The Big Cycle.)  Clearly, the monetary order will have to change in big disruptive ways to reduce all these imbalances and excesses, and we are in the early part of the process of it changing. There are huge capital market implications to this that have huge economic implications, which I will delve into at another time.  

2. The domestic political order is breaking down due to huge gaps in people's education levels, opportunity levels, productivity levels, income and wealth levels, and values—and because of the ineffectiveness of the existing political order to fix things. These conditions are manifest in win-at-all-cost fights between populists of the right and populists of the left over which side will have the power and control to run things. This is leading to democracies breaking down because democracies require compromise and adherence to the rule of law, and history has shown that both break down at times like those we are now in. History also shows that strong autocratic leaders emerge as classic democracy and classic rule of law are removed as barriers to autocratic leadership. Obviously, the current unstable political situation will be affected by the other four forces I’m referring to here—e.g., problems in the stock market and economy will likely create political and geopolitical problems.  
 

 » Tariffs on US goods will rise to 125% — and this will be our final adjustment.
Regardless of future US actions, China will no longer respond. «
China's Customs Tariff Commission, April 11, 2025.

3. The international geopolitical world order is breaking down because the era of one dominant power (the US) that dictates the order that other countries follow is over. The multilateral, cooperative world order the US led is being replaced by a unilateral, power-rules approach. In this new order, the US is still largest power in the world and is shifting to a unilateral, "America first" approach. We are now seeing that manifest in the US led trade-war, geopolitical war, technology war, and, in some cases, military wars.  
 

4. Acts of nature (droughts, floods and pandemics) are increasingly disruptive, and
 

5. Amazing changes in technology such as AI will be highly impactful to all aspects of life, including the money/debt/ economic order, the political order, the international order (by affecting interactions between countries economically and militarily), and the costs of acts of nature. 

 

 Shadowboxing in a hall of mirrors:

On April 12, Trump excluded smartphones and electronics
from his April 9, 125% tariff on China.

Changes in these forces and how they are affecting each other is what we should be focusing on. For that reason, I urge you to not to let news-grabbing dramatic changes like the tariffs draw your attention away from these five big forces and their interrelationships, which are the real drivers of Overall Big Cycles changes. 

 

Ray Dalio, founder of the world’s largest hedge fund, said mismanaged global tariffs and economic

policies could push the US economy, already nearing recession, into a far worse crisis, April 13, 2025.

[...] I also urge you to think about the interrelationships that are critically important. For example, think about how  Donald Trump's actions on tariffs will affect 1) the monetary/market, economy order (it will be disruptive to it), 2) the domestic political order (it will likely be disruptive to it as it will probably undermine his support), 3) the international geopolitical order (it will be disruptive to it in many obvious ways that are financial, economic, political, and geopolitical) 4) climate (it will somewhat undermine the world’s ability to deal with the climate change issue effectively), and 5) technology development (it will be disruptive in some positive ways to the US, like bringing more technology production into the US, and in some harmful ways, like being disruptive to the capital markets that are needed to support technology development and in too many other ways to innumerate here.)
 

Quoted from:
Ray Dalio (April 7, 2025) - Don't Make the Mistake of Thinking That What's Now Happening is Mostly About Tariffs.

[Ray Dalio is the founder, CIO mentor, and member of the Bridgewater Board.]

 

See also:
Ray Dalio (March 26, 2025) - How Countries Go Broke: The Overall Big Cycle.

Lu QiYuan (December 8, 2024) - Scott Bessent's Covert MAGA Strategy for Trump 2.0.  

Trump commenting on how much money his billionaire friends made when he paused

tariffs on Wednesday, April 9: "He made $2.5 billion today, and he made $900 million". 

Corruption, insider trading, or just good timing and coincidence? 

April 10, 2025.

Trump and Stockholm Syndrome: In a Captured State | Steve Brown

The current reverence for Donald Trump as potential savior of the Western world is like a twisted version of Stockholm Syndrome. The Biden regime was so vile and so corrupt, that the manifestation of Trump (since his election) seems like a life raft thrown to a drowning person. In other words, the US situation is so hopeless that any sort of hope from anywhere must look good to the average US American now.

 

» A Western financial system built on bullshit and fake industry. «

 

Trump is, of course, beholden to his donor class. It is a donor class where unsavory ‘trillionaires’ like Zuckerberg, Bezos, and their Wall Street moguls (including the banks) have ‘switched sides’ to back the Trump regime. And well, that is the mantle of power. Trump’s backers preside over war, mayhem, and death all over the globe with glee – just as Biden’s did. The only question for elites now – whether Democrat or Republican – is  how affordable this ongoing destruction may be.

 

The great debacle for the former United States is that its political leadership has failed — meaning both parties — and the Wall Street model of leveraged graft, theft, corruption, and greed has eventually devolved into a Western financial system built on bullshit and fake industry — which Pepe Escobar calls ‘casino capitalism.’ That devolution has now become apparent to the entire world. Trump has drawn a veil over donor influence by promoting a populist message of ending the ‘forever wars’ that the US engages in. But ending forever wars is not a goal that the entrenched Military-Industrial Complex (MIC) can allow, even if that is the will of the American people.

 » MAGA in itself is an admission that the US has already failed. «

Thus, Trump has used the immigration issue as cover too, to obfuscate a deeper agenda. That agenda includes confrontation with China, assistance to the Greater Israel project, and accepting advice to leverage crypto as a means to support the lagging primacy of the US dollar. The foregoing agenda will be enforced later during his regime after the dust has settled.

The point is, Trump promised to “make America great again” — which in itself is an admission that the US has already failed and is playing catch-up. China’s success in AI with Deep Seek is just one example. Bottom line, where US America was once about its industry and the ingenuity of its people, due to the criminality of Wall Street and its banks, that dynamic is gone. Ironically, all that remains of US success (as a unipolar hegemon) is the primacy of the US dollar.

 

 And the swamp? Still thriving.

It's a deep swamp, and we are about to learn a lot more than
we ever knew about what horrors lie in the podscum.

US financial markets, including debt instruments, are still the most secure and reliable stash for trillions of US-manufactured Federal Reserve Notes to go. Of course, when those dollar investment vehicles become ignored by the rest of the world, that becomes an issue, and that process is underway. Meanwhile, I stand by my article from 2019, "Trump’s Limited Hangout: Populism Derailed."

 

 Fun Facts 101: The list of names in Jeffrey Epstein’s book of Mossad assets
includes Robert F. Kennedy Jr., Elon Musk, and Donald Trump. 

While the above may seem a bleak message for the West, the bottom line is that the United States has been on the wrong side of history since the end of the Second World War. Only the redeeming asset of the US dollar and Western financial markets have maintained US primacy over these decades.

The hopeful message is that, as the US dollar erodes and eventually US financial markets crash, the Neocons and satanic creatures who have led US foreign policy for eighty years now will finally erode away as well—or at least be marginalized—and that's via their own historic folly, personal excess, and greed.

Quoted from:
Steve Brown (February 1, 2025) - Trump and Stockholm Syndrome: In a Captured State.

 

♪ Here comes the Sun ♫

 

See also:
¡ Alex Krainer (January 29, 2025) - Dedollarization is Escalating & Elimination of Debt through Inflation. (video) !

Simon Hunt (January 11, 2025) - Markets Amidst Trump 2.0: Geopolitics & Geoeconomics in 2025.

Martin A. Armstrong (June 6, 2024) - The Five Stages of the Revolutionary Cycle.

L. David Linsky (October 24, 2023) - War and Regime Change soon in the US.

The Financial System Has Reached The End | Egon von Greyerz

The world is now witnessing the end of a currency and financial system which the Chinese already forecasted in 1971 after Nixon closed the gold window [...] History tells us that we have now reached the point of no return. So denying history at this point will not just be very costly but will lead to a total destruction of investors’ wealth. 

 

History never lies but politicians do without fail. In a fake system based on false values, lying is considered to be an essential part of political survival. Let’s just look at Nixon's ignorant and irresponsible statements of August 15, 1971 when he took away the gold backing of the dollar and thus all currencies. Later on we will show how clear-sighted the Chinese leaders were about the destiny of the US and its economy. So there we have tricky Dick’s lies:

• The suspension of the convertibility of the dollar in 1971 is still in effect 52 years later.
• As the dollar has declined by almost 99% since 1971, the “strength of the economy” is also declining fast although using fiat money as the measure hides the truth.

And now to the last lie: “Your dollar will be worth just as much tomorrow”. Yes, you are almost right Dick!  It is still worth today a whole 1% of the value when you closed the gold window. The political system is clearly a farce. You have to lie to be elected and you have to lie to stay in power. That is what the gullible voters expect. The sad result is that they will always be cheated. So in 1971 after Nixon closed the gold window, China in its official news media the People’s Daily made the statements below: 

 

Clearly the Chinese understood the consequences of the disastrous US decision which would destroy the Western currency system as they said:

• Seriousness of the US economic crisis and decay and decline of the capitalist system.
• Mark the collapse of the monetary system with the US dollar as its prop.
• Nixon’s policy cannot extricate the US from financial and economic crisis.

I am quite certain that the US administration at the time ridiculed China’s official statement. As most Western governments, they showed their arrogance and complete ignorance of history. How right the Chinese were. But the road to perdition is not immediate and we have seen over 50 years the clear “decline of the capitalist system”. The end of the current system is unlikely to be far away. Interestingly it seems that a Communist non-democratic system is much more clairvoyant than a so called Western democracy. There is clearly an advantage not always having to buy votes. 

 

As the whole currency system is about to implode,  it is in my view totally irrelevant where the US dollar is heading short term measured against other fiat currencies. The dilemma is that most “experts” use the Dollar Index (DXY) as the measure of the dollar’s strength or weakness. This is like climbing the ladder of success only to find out that the ladder is leaning against the wrong building. To measure the dollar against its partners in crime (the other fiat currencies) misses the point as they are all on the way to perdition. So the dollar index measures the dollar against six fiat currencies: Euro, Pound, Yen, Canadian Dollar, Swedish Kroner and Swiss Franc. The Chinese Yuan shines in its absence even though China is the second biggest economy in the world. But here is the crux. The dollar is in a race to the bottom with 6 other currencies. Since Nixon closed the gold window in 1971 all 7 currencies, including the US dollar, have declined 97-99% in real terms. Real terms means constant purchasing power. And the only money which has maintained constant purchasing power for over 5,000 years is of course gold. So let’s make it clear – the only money which has survived in history is GOLD!

All other currencies have without fail gone to ZERO and that without exception. Voltaire said it already in 1729: "Paper money eventually returns to its intrinsic value – zero." And that has been the destiny of every currency throughout history. Every single currency has without fail gone to ZERO. And this is where the dollar and its lackeys are heading. To debate if a currency, which has fallen 98.2% in the last 52 years, is going to strengthen or weaken in the next year or two is really missing the point. It is virtually 100% certain that the dollar and all fiat money will complete the cycle (which started in 1913 with the creation of the Fed) and fall the remaining 1-3% to ZERO. But we must remember that the final fall involves a 100% loss of value from today.

 

 

[...] The world’s reserve currency has had a sad performance based on lies, poor real growth, all due to a mismanaged economy based on debt and printed money. So although most currencies have lost 97-99% in real terms since 1971 there are shining exceptions. When the gold window was closed in 1971 I was working in a Swiss bank in Geneva. At the time, one dollar cost Swiss Franc 4.30. Today, 52 years later, one dollar costs Swiss Franc 0.88! This means that the dollar has declined 80% against the Swiss Franc since 1971. 

 

So a country like Switzerland with virtually no deficits and a very low debt to GDP proves that a well managed economy with very low inflation doesn’t destroy its currency like most irresponsible governments. The Swiss system of direct democracy and people power is totally unique and gives the people the right to have a referendum on almost any issue they choose. This makes the people much more responsible in their choices as a winning vote on any issue becomes part of the constitution and cannot be changed by government or parliament. Only a new referendum can change such a decision. Swiss Debt to GDP is around 40%. This was the level of US debt back in 1971 before the gold window was closed. [...] US debt to GDP is now 132%. In 2000 it was 55%. 132% debt to GDP is the level of a Banana Republic which is frantically trying to survive by printing and borrowing ever increasing amounts of worthless fiat money.

  

Quoted from:
Egon von Greyerz (Nov 27, 2023) - The Financial System Has Reached The End.

 

 Agustín Carstens, general manager of the Bank for International Settlements (BIS) — the central bank of central banks in Basel, Switzerland — admits that Central Bank Digital Currency (CBDC) will grant central bankers » absolute control « over how it can be used, and the technology to be able to centrally enforce that. Not 'up to date' with your injections? Exceeded your weekly carbon allowance? Ventured outside of your designated '15 minute' district? Oops, no money for you!  

 

» Digital ID and CBDC is the essence of scientific dictatorship «, says Patrick Wood, author of the 2014 book 'Technocracy Rising: 

The Trojan Horse of Global Transformation'. He breaks down the all-encompassing digital open-air prison

that CBDC and digital ID are designed to facilitate.

 

Joe Rogan, host of the world's most popular podcast, is now wide awake to the grave dangers posed to freedoms by CBDC, and the social credit systems that it facilitates. » If you get a bad social credit score because you tweeted something they didn't like, now you can't buy a plane ticket, now you can't buy a car, now you can't get a loan. «

See also:

Bank for International Settlements (2023) - BIS Innovation Hub work on central bank digital currency (CBDC).

International Monetary Fund (Nov 20, 2023) - Central Bank Digital Currency Development Enters the Next Phase.

Atlantic Council (Mar 21, 2023) - Snapshot: Which countries have made the most progress on CBDCs so far in 2023.

Imran N. Hosein (2021) - The Bretton Woods International Monetary System.

Carroll Quigley (1963) - The BIS — The Apex Of The System.

Carl Schmitt (1932) - Legality and Legitimacy.

Avoiding Default By Destroying Others | The War-And-Pillage Business Model

The US started talking again about a possible default. However, while a default is technically possible, it is unlikely for now. A default would have immediate severe consequences for the US themselves. Their entire war economy would collapse. And why default now? So far continued destruction of other countries has proved to be a lucrative alternative, attracted investors and directed gigantic capital flows to the US.

 

 Wonders of a War-And-Pillage Economy.

Since 2008 full spectrum assault missions on European Union countries turned out to be nothing short of a success story for the US. In dollar terms the EU economy is now down to 65% of the United States economy. That’s down from 91% in 2013. American GDP per capita is now more than twice that of the EU, and the gap continues to widen. However, now one dollar is worth 50 cents in 2020 dollars. And why exactly is 2013, the year before the US Maidan coup in Ukraine, important? Because in 2013 the US systematically began to use sanctions mechanisms to deprive the European Union countries of cheap Russian energy and to force them to break off beneficial trade and projects with Russia and China. Capital fleeing from the EU to the US was triggered and has been increasing ever since. The US is perfectly content with the now rapidly de-industrializing, US energy-dependent, asset-stripped and broke European Union and will abuse it as long as it lasts. 

RAND Corporation (Jan 25, 2022) - Crush Europe and Strengthen the US.

 

So this time around, which are the remaining wealthy, long-term strategically expendable, docile and suicidal vassal states expected to finance the US for just a little bit longer: Saudi Arabia, Qatar, the UAE? Taiwan, South Korea, Japan? In reality the recently near global US dollar hegemony shrunk by half a planet since February 2022. Destroying and plundering Russia, China and Iran remains the US' only goal and hope. Whatever it takes. For the universal triumph, to the full satisfaction and for the eternal glory of their chosen masters. Or, under certain circumstances, God willing, war and regime change in the US will soon mess up those ambitions, as L. David Linsky suggests.

 

April 27, 2023 – Federal Reserve Chairman Jerome Powell speaking plainly about sensitive issues, sanctions against Russia, 

shrunken labor force, high inflation, minuscule growth, ample support to Ukraine, his interest rates-scheming for 2023, etc.

in a real Russian television interview with pranksters Vovan and Lexus, who posed as Ukrainian President Volodymyr Zelensky. 

» O my people, your guides mislead you and they have swallowed up the course of your paths. «
Prophet Isaiah, Holy Bible.

 

 » Know your enemy. «
Sun Tzu, The Art of War.

Ratings of a Failed Empire

War is war. The US budget deficit for the first 9 months stood at a staggering $2 trillion when the US Treasury declared it would add another $776 billion to US debt before 2023 ends. These were absolute and unprecedented historical records. More war? No problem.

 

 2021  ─  Old news still good.

 

2023  ─ End game of US forces in the Sahel, in the Gulf, 

the Red Sea, the Black Sea, in Iraq, Syria, Ukraine, and Palestine.

Yesterday  ─  November 10  ─  the US government attempted to borrow $24 billion by selling some fresh 30-year debt. It was a huge disaster. In order to attract enough buyers, the rate had to be raised sharply. And even so, the major US banks had to buy 25% of the debt because there were no other buyers at all. Even frequent buyers like Japan didn't participate this time. With buyers catastrophically scarce, the US government keeps borrowing more than ever and has no intention of stopping. Well, if they really want to borrow such amounts, they will be forced to offer ever higher rates to attract lenders. Everyone knows what high interest rates are doing to their economy and people. The Biden administration's debt isn't just getting more expensive to service. It's also getting harder and harder to sell at all. 

 

 The never-bankrupt-empire's yield   ─  November 7 - 10, 2023.

 

Moody's downgraded the outlook on the US credit rating to 'negative' from 'stable', citing large budget deficits and declining debt affordability, prompting immediate criticism from President Joe Biden's administration. The revised view from Moody's means the likelihood of a further downgrade of the US over the next 12 months. The ratings agency said that "continued political polarization" in US Congress raises the risk that lawmakers will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability. Etcetera.

 

The American special tribute toll to the masters of their fate  ─  2007 - 2053.

Moody’s was the only and last of the three main credit rating businesses with a top rating on the US after Fitch Ratings downgraded the US government in August following their latest 'debt-ceiling battle'. S&P Global Ratings stripped the US of its top rating in 2011 amid what was brandished 'debt ceiling crisis'. Immediately after the Moody's release, White House spokesperson Karine Jean-Pierre said the change was "yet another consequence of congressional Republican extremism and dysfunction." And Deputy Treasury Secretary Wally Adeyemo disagreed with the evaluation. He said the Biden administration had demonstrated its commitment to fiscal sustainability, the American economy remains strong, and Treasury securities are the world’s preeminent safe and liquid asset. Sure, except for some good reasons.

 

» The Civilization-State always maintains self-sufficiency, autonomy and autarchy.
The Globalist-State does not. «

Alexander Dugin, The Civilization-State. ─ June 02, 2023.

Creditors And Debtors In The Real Sector Of The World

An interesting picture is emerging: China is a creditor to other countries in the world to the tune of more than 1,300 billion dollars. This is according to a report published by AidData: "With new data from more than 700 state-owned lenders and donors in China, we show that Beijing remains the largest source of international development finance in the world. It continues to surpass all other bilateral and multilateral sources of aid and credit to the developing world, including the US and the World Bank." Note that China, together with Hong Kong, is by a wide margin the world's largest lender. The top 8 largest debtor countries have not changed for many years (Ireland is to be overtaken by Italy early next year), but the amount of debt is growing: 1. US, 2. UK, 3. Japan, 4. Netherlands, 5. France, 6. Ireland, 7. Italy, 8. Germany. G8 total external debt ~ over $63 trillion. 

Quoted from:
Pravda (Nov 09, 2023) - An interesting picture is emerging.

Islam and the Future of Money | Imran N. Hosein

The modern monetary system emerged out of the Bretton Woods Conference of 1944 and collapsed in August 1971. It was then replaced by the petro-dollar monetary system. The ‘Ulama - Islamic scholars - lack both the knowledge and the tools of analysis with which to be able to come to the conclusion that the petro-dollar monetary system is bogus, fraudulent, and Haram - unlawful and impermissible in Islam. Unless and until the ‘Ulama of Islam study international monetary economics and summon the courage to stand up for truth and justice (al-M’aruf) while exposing and opposing all that is false and unjust (al-Munkar), it would remain impossible for Muslims to escape from this poisonous financial web which has been spun around us.

» No one in history has ever experienced the unique injustice and oppression that mankind now experiences by the
international monetary and banking system. Allah Most High made the use of gold and silver as money Halal  - lawful.
Whoever makes Haram - unlawful - what Allah has made Halal, has committed the ultimate sin of Shirk , blasphemy. «
Sheikh Imran N. Hosein

We need to confront our ‘Ulama with the argument that the Shari’ah - the sacred law of Islam - cannot be enforced unless and until we restore Dinar and Dirham - gold and silver - as money, and we cannot restore Dinar and Dirham as money while yet we remain member-states of the International Monetary Fund. This is because the Articles of Agreement of the IMF, mysteriously so, prohibit the use of gold as money. If the world is to ever know why the Zionist-fashioned IMF prohibited the use of gold as money, the question must be put to Dajjal, the Antichrist. Dajjal needs a fraudulent monetary system so that he can reduce one part of the world to abject poverty and financial slavery, while enriching that part of the world which supports him and works for him. 

Quoted from:
Sheikh Imran N. Hosein (2013) - Muslims must stop using US Dollar.

 

See also:
Sheikh Imran N. Hosein (2023) - Islam and the Future of Money.