Financial markets seemed cautiously optimistic Monday, rising modestly across the board in early market trading, despite a wild weekend of uncertainty that followed a long week of the same.
‘Tariffs’ is the word on everybody’s mind as China and the U.S. duke it out for global supremacy of the financial world order.
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Despite the considerable sound and fury kicking off President Donald Trump’s version of negotiations, the U.S. was clearly placed on the defensive after China really started retaliating against U.S. tariffs.
First, markets got the good news that President Trump would be exempting certain electronics, namely computers and smartphones, but the market reaction to that has been muted, with the major indices rising modestly on Monday.
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The president walked back that announcement, calling the exemptions temporary before claiming that there were exemptions for “nobody,” adding even more confusion to the situation.
Despite the president’s assertion, the U.S. Customs and Border Protection office filed a notice on Friday stating that smartphones, computers, and other electronics are exempt.
Ray Dalio has a dire warning for the president
These moves have rattled markets, and the business community has overwhelmingly supported Trump’s presidential campaign.
Ray Dalio, founder of the asset management fund Bridgewater Associates, wasn’t one of those people. The week before the election, he told CNBC that both candidates worried him, saying that both were too polarizing and that America needed someone to rule from the middle.
He also said he liked Trump because he is “a lot more capitalist,” but three months into Trump’s second term, his opinion of the president’s economic acumen seems to be shifting.
“[We’re] very close to a recession. And I’m worried about something worse than a recession if this isn’t handled right.” Dalio went on to define a recession as two consecutive quarters of negative gross domestic product growth.
During the Great Recession, which officially lasted from December 2007 to June 2009, real GDP fell by 4.3%. The economy shed over 8.7 million jobs between February 2008 and February 2010.
In 2008, the S&P 500 fell by nearly 40%, the Dow dropped by 35%, and the Nasdaq fell by 42%.
Ray Dalio isn’t a fan of the changes to the monetary order happening right now.
Image source: Dipasupil/Getty Images
So, if a recent recession featured all that calamity, what could Dalio possibly see as a worse outcome?
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“We have a breaking down of the monetary order. We are going to change the monetary order because we can’t spend the amounts of money [that the U.S. is currently spending], so we have that problem,” Dalio said.
“We are having profound changes in our domestic order… and we’re having profound changes in the world order. Such times are very much like the 1930s.”
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This isn’t the first time Dalio has mentioned the 1930s.
Before the election, Dalio also said that Trump would reform the government similar to the way “hard-rightist states in the 1930s” did.
The business community values stability over anything, and Trump’s economic policies so far have engendered anything but. Consumer sentiment is down for the fourth straight month, dropping 11% from March, according to the University of Michigan Consumer Survey.
“If you take tariffs, if you take debt, if you take the rising power challenging the existing power…if you take those factors, those changes in the systems are very, very disruptive. How that’s handled could produce something that is much worse than a recession,” Dalio said.
NEW: RAY DALIO SAYS “I’M WORRIED ABOUT SOMETHING WORSE THAN A RECESSION… WE HAVE SOMETHING THAT IS MUCH MORE PROFOUND, WE HAVE A BREAKING DOWN OF THE MONETARY ORDER”
— DEGEN NEWS (@DegenerateNews) April 13, 2025
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