From the moment US President Donald Trump announced his latest tariffs, people across the globe have been speculating about whether his decision would lead to a global economic recession.
It seems that some of the world’s leading economic minds worry that, unfortunately, there is a risk of something worse than a simple recession and that the repercussions could spill over into the global arena of politics and security.
At the forefront of these figures is the famous American billionaire Raymond Dalio, who has become one of the richest people alive since founding Bridgewater, one of the world’s largest hedge funds.
In a post on "X," and on NBC’s "Meet the Press" last Sunday, Dalio sounded the alarm. He warned not only of a possible recession but also of greater unrest fueled by economic policies and other factors.
How can we take away from Dalio’s warnings?
Those well-versed in the world of economics understand that the world seems to be on the verge of a classic monetary and political collapse, and that major geopolitical configurations of the past three and a half decades (that is, since the post-Cold War era and the fall of the Soviet Union) are falling apart.
Such radical shifts, close to a collapse, happen only once in a lifetime, when a combination of unsustainable conditions trigger this kind of upheaval. So, what about them?
In short, we can point to the global debt crisis in general and a particularly acute American debt crisis, along with fears of an unexpected failure to meet its obligations.
There is also the troubling rise in unequal opportunities and access to education in the United States, where class divisions are hardening and education is increasingly linked to wealth. Add the shifting landscape of the global geopolitical order, seen clearly in the ideological rallying cry of the Trump administration: "America First."
Moreover, the forces of nature seem to be adversaries to any global stability. Floods, pandemics, earthquakes, and tsunamis may be about to get worse, especially in light of the ecological setbacks in the US: the return of coal mining, US withdrawal from climate agreements, and the institutions of international cooperation shutting down.
In the eyes of Dalio, Washington was in need of a more moderate leader than the candidates on offer last November: a leader committed to reducing the federal deficit to 3 percent of GDP. Otherwise, greater problems in the supply and demand for debt would emerge. Along with other negative developments, these challenges, Dalio has warned, would precipitate a political battle that could spark a civil war in the US.
Politics remains a powerful and even pressing force shaping the economy. Dalio was acutely aware of this on the eve of the US presidential elections last November, refusing to endorse either of the two major parties.
In an article for Time magazine at the time, Dalio wrote that he felt like he had been "faced with the choice between a strong, unethical, almost fascist Republican Party and a frail, untruthful, and enigmatic Democratic Party."
What experts fear most is that the economic climate shaped by politics, which has been aggravated by dramatic measures tied to the American military-industrial complex and attempts to contain it, could lead to a revival of the deadly era humanity saw between 1930 and 1945.
At that time, many regions across America and Europe were rocked by devastating economic crises that drove even well-established democracies down a path toward brutal dictatorship.
Germany, Spain, and Japan had all had parliamentary systems, but they collapsed under the weight of domestic conflicts between the extreme left and the extreme right as communism and fascism rose to the fore.
Are we now witnessing modern versions of these old human riddles?
Some argue that the US underwent a kind of recession in the 1970s, and that this recession gradually faded during the 1980s thanks to the technological boom. Then came the winds of globalization in the 1990s, propelling the US into a position of global leadership after the fall of the Soviet Union.
However, the spirit of isolationism and the slogans of American supremacy are now obstructing globalization, both in form and substance.
Has the moment of entropic obscurity arrived?
