Ray Dalio
Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has a stark warning for investors in the American market.
“For those who care about the value of their money, the risks for U.S. government debt are greater than the rating agencies are conveying,” he wrote in an alarming post on X in May.
Dalio was referring to the recent downgrade of the U.S. sovereign credit rating by Moody’s, following similar moves by S&P Global in 2011 and Fitch in 2023.
This move was hardly surprising considering how the U.S. economy has been thrown into turmoil by Trump’s erratic policies.
Desmond Lachman, a senior fellow at the American Enterprise Institute, a public policy think tank based in D.C., said in June that Trump’s risky policies — not limited to tariffs, but also including his increasing pressure on the Chair of the Federal Reserve, Jerome Powell, to cut interest rates, among other poor choices — will result in an economic crisis in the states.
“The late MIT economist [Rudi] Dornbusch said that economic crises take a lot longer to occur than you might have thought possible. However, when they do occur, they occur at a much faster rate than you might have thought probable,” Lachman wrote.
“Maybe then Trump might dial back his aggressive import tariff and budget-busting tax cut policies. However, I fear that like in Greek tragedies, that is unlikely to occur before it is too late.”
With these gloomy predictions coming from experts on the U.S. market, what should Canadian investors do to ensure their portfolios aren’t too exposed to the volatility and risk of U.S. investments? Is it time to set your sights on other international markets?
The U.S. Dollar Index fell 10.8% in the first half of 2025 — marking its worst performance since 1973 when Richard Nixon was president. Meanwhile, inflation has steadily chipped away at the dollar’s purchasing power. According to the Federal Reserve Bank of Minneapolis inflation calculator, US$100 in 2025 buys what just US$12.56 could in 1971 — the year the U.S. moved off the gold standard.
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