The China Development Forum 2023, hosted by the Development Research Center of the State Council of China, kicked off in Beijing on March 25th and will run until the 27th. The annual event brings together high-profile business leaders, policymakers, and academics from around the world to discuss China’s economic development and its global implications.
One of the highlights of the forum was the speech by Ray Dalio, the founder of Bridgewater, the world’s largest hedge fund. According to a report by the Pengpai newspaper, Dalio issued a warning that the world is “on the edge of danger” and could face a “seismic” upheaval.
Dalio pointed out three main factors that he believes are driving the current situation: the monetization of enormous debt, huge internal conflicts due to differences in wealth and values, and conflicts between global powers. He emphasized that these three problems are the biggest since 1930-1945 and have already reached a crisis level.
The founder of Bridgewater noted that several indicators, such as real per capita income, life expectancy, and nutritional level, have improved greatly in the long run due to technological advances. However, he also warned that several short cycles accumulate to form large long-term cycles, which can lead to debt write-offs and monetization of huge debts when the debt ratio rises and becomes unmanageable.
Dalio stressed that the debt-to-GDP ratio is already at a fairly high level, and central banks, including the Fed, are tightening policies to deal with inflation, cracks in the market, and the weakening economy.
Furthermore, he diagnosed that the world has entered a great international geopolitical cycle at a time when the Russo-Ukrainian war continues and the world is uneasy. He emphasized that history has shown that when these three forces – monetization of enormous debt, huge internal conflicts, and conflicts between global powers – stack together, they often lead to domestic and international order changes, causing dramatic upheavals.
Dalio’s warning is a stark reminder that the global economy is facing significant challenges that require urgent attention from policymakers and business leaders. As the world emerges from the COVID-19 pandemic, it is crucial that governments and international organizations work together to address these pressing issues and build a more stable and sustainable future.
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This article was republished from azcoinnews.com
