Ray Dalio speaks to CNBC at the Future Investment Initiative event in Riyadh, Saudi Arabia, on October 30, 2024.
CNBC
Post-election America worries US billionaire Ray Dalio, who has repeatedly called for reform amid a clashing political landscape he sees as irreconcilable differences between Democrats and Republicans.
The founder of investment firm Bridgewater Associates spoke at the Future Investment Initiative conference in Saudi Arabia on Wednesday, where he discussed key geopolitical and election-related issues, the rising U.S. deficit and how investors can best allocate their investments combination.
“Both candidates worry me,” Dalio told CNBC. “The left, the right and fighting each other is an issue as it becomes more extreme. I think there needs to be a need to bring Americans together, the middle, and make great reforms. … There needs to be a strong leadership I believe this will lead to great reforms…Neither candidate is right for me.
Dalio noted that Republican presidential candidate Donald Trump is “more capitalist” than Democratic candidate Kamala Harris and therefore better suited to domestic capital markets. However, he warned that an economy run by either party would run huge deficits. He added that there are major differences between the two candidates, including on tax policy, noting that Trump’s plan to collect more tariff revenue could cause prices to spike, depending on how well the revenue translates into internal productivity.
The aftermath of the election “is really more about left and right, which is a shame because we need to bring the country together in a smart way and make great reforms. We need to do that,” Dalio said. “Debt is a worry, internal conflict is a worry, external conflict is a worry and of course climate and the costs of climate are a worry.”
Dalio said he remains concerned about the increase in the supply of U.S. Treasuries. He said about one-third of U.S. Treasuries are held by foreigners, making supply and demand issues more of an upside risk than a downside risk for investors.
“We have a real debt problem… I think one person’s debt is another person’s asset,” Dalio said. “The Treasury market is the basis for all capital formation. At some point, when you combine that with the issue of internal conflict, if the economy is down — when The recession is coming – I worry about internal politics and social conflict.
When configuring a portfolio, the famous investor said gold should be part of a diversified and balanced strategy that reduces overall risk.
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