Ray Dalio speaks with CNBC at the Future Investment Initiative in Riyadh, Saudi Arabia, on October 30, 2024.
CNBC
Post-election America is of concern to American billionaire Ray Dalio, who has called for reforms many times amid a political scene filled with what he considers to be irreconcilable differences between the Democratic and Republican parties.
Speaking at the Saudi Arabia Future Investment Initiative conference on Wednesday, the founder of investment firm Bridgewater Associates spoke about geopolitical and election concerns, the issue of rising US deficits and how investors can best position their portfolios.
“Both candidates worry me,” Dalio told CNBC. “This left and right fighting is a problem because it's becoming more extreme. I think there has to be Americans coming together, in the middle of that, and making great reforms. … There has to be a strong leader and I think that will lead to great reforms.” …And none of the candidates did that for me.”
Dalio noted that Republican presidential nominee Donald Trump is “far more capitalist” than Democratic nominee Kamala Harris and is therefore better for local capital markets. However, he warned that there would be a large deficit in the economy run by either party. He added that both candidates have significant differences, including on tax policies, noting that Trump's plan to collect more tariff revenue could lead to higher prices depending on how much of that revenue is converted into domestic productivity.
Dalio said the election consequences “are really a matter of left and right, which is unfortunate because we need to unify the country in a smart way and make big reforms. We need to do that.” “Debt is troubling, internal conflict is troubling, external conflict is troubling, and certainly climate and climate cost are troubling.”
Dalio said he remains concerned about the increase in the supply of US Treasuries. About a third of U.S. Treasuries are held by foreigners, creating a supply-and-demand problem that poses more upside risk than downside risk for investors, he said.
“We have a real debt problem,” Dalio said. “I think one man's debts are another man's assets.” “The Treasury market is the foundation of all capital formation. At some point, when it is combined with the issue of internal conflict, if you have a downturn — when deflation comes — I worry about internal political and social conflict.”
When laying out his investment portfolio, the famous investor said that gold should be part of a diversified and balanced strategy that minimizes overall risks.
