US sliding into autocracy, hedge fund billionaire warns

Hedge fund billionaire Ray Dalio cautioned that the United States is drifting toward 1930s-style autocratic politics, driven by widening wealth gaps, value disparities, and collapsing trust. Speaking to the FT, the Bridgewater Associates founder compared current US policies and state interventions—such as President Trump’s acquisition of a 10% stake in Intel—to strong autocratic measures historically used to control financial and economic crises. Dalio emphasized that many investors remain silent due to fear of retaliation.

Dalio also raised concerns about the Federal Reserve’s independence following Trump’s moves to replace a governor and nominate a loyal ally to the Fed board. He warned that a politically weakened central bank, pressured to maintain low interest rates, could undermine confidence in the dollar and weaken the global monetary order. He noted that international investors have started moving from Treasuries to gold.

Highlighting long-term fiscal risks, Dalio argued that years of large deficits and unsustainable debt growth have brought the US economy close to a debt crisis. He described the budget imbalance—$7 trillion in spending versus $5 trillion in revenue—as creating a scenario where new debt issuance may outpace demand, threatening fiscal stability. Dalio warned the Fed could face stark choices: allow rates to rise and risk default or print money to purchase unsold debt, both potentially weakening the dollar.

Dalio also flagged the broader trend of increasing state control over markets and businesses, noting that extreme wealth gaps fuel populism and weaken democratic processes, potentially increasing the appeal of more autocratic leadership in times of crisis.

via FT