Billionaire and former CEO of the hedge fund Bridgewater Associates Ray Dalio published a note on the tariff war. In it, he stated that the current global monetary order is on the brink of collapse.
The billionaire stated that some people believe the impact of tariffs on the global market is a short-term factor and that its effects will fade as new agreements are made between the US and other countries. But there is also an opposing opinion:
"However, now I hear from a large and growing number of people who have to deal with these problems that it is already too late. For example, many exporters and importers say they need to significantly reduce their deals in the American market. They acknowledge that no matter what happens with the tariffs, these issues will not disappear, and that a radical reduction in interdependence with the US is a reality that needs to be prepared for," Dalio emphasized.
According to the expert, regardless of the outcomes of the negotiations between the US and China, major counterparts in these countries already need to seek alternatives. Moreover, according to Dalio, the role of the US as the largest consumer of goods and provider of debt obligations is becoming more untenable.
This produces fragmentation in the global economy. It may, in turn, lead to currency weakening and increased geopolitical risks. This is exactly what Dalio means by the collapse of the current global monetary order.
In the expert's opinion, it is only a matter of time before other countries start forming their own trade networks, using alternative currencies. Dalio urged the US authorities to take more calm and coordinated actions to eliminate trade imbalances and increase self-sufficiency.
He believes it is necessary to first resolve the issue of the US national debt.
The introduction of tariffs on imported goods by President Donald Trump has led to high volatility in both the cryptocurrency and stock markets.
After that, the head of state decided to tighten the conditions for China, putting other tariffs 'on pause.' Ultimately, he allowed for a softening of conditions, which, in turn, triggered a surge in trader activity and an increase, particularly in crypto assets.#Write2Earn #BinanceSquare #TradeStories #Binance #FOMCMeeting $ETH