Ray Dalio Warns ‘Something Worse Than a Recession’ Looms, Saying America ‘Has a Debt Issue’ and Is ‘In a Period Very Much Like the 1930s’

In a sobering interview on NBC’s Meet the Press this past Sunday, billionaire investor Ray Dalio issued a stark warning: The U.S. and global economy may be heading into a period of unprecedented instability — one potentially “worse than a recession.” Citing President Donald Trump’s administration’s aggressive tariff policies, rising geopolitical tensions, and unsustainable debt levels, Dalio predicted a possible breakdown of the international monetary systems. 

Dalio, the founder of one of the world’s largest hedge funds, Bridgewater Associates, said we are now at a “decision-making point,” with U.S. policy potentially triggering deeper economic and geopolitical consequences than any financial crisis in recent memory. And while Dalio agrees America has a host of problems that needs to be solved, there’s no great solution to get us there.

Trump’s Tariffs and the Shift to a Unilateral World Order

Dalio’s primary concern is the unraveling of the post-World War II multilateral economic system, which he says is being rapidly replaced by a more fragmented, unilateral order led by the U.S. under President Donald Trump.

“We are going from multilateralism… to a unilateral world order in which there’s great conflict,” Dalio said, noting the escalating trade war with China and breakdowns in diplomatic cooperation. Trump’s 2025 tariff blitz has seen duties surge to 145% on some Chinese goods, with a baseline of 10% across most imports. Though a 90-day pause was announced last week on some reciprocal tariffs, uncertainty continues to cloud global trade.

Dalio said he actually agrees with the motivations behind the tariffs — particularly the need to address trade imbalances and protect domestic manufacturing — but criticized their implementation. “I agree with the problem,” Dalio said. “I am very concerned about the solution.”

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Debt, Bonds, and the Monetary System Under Pressure

Dalio’s critique wasn’t limited to trade. He also raised red flags about the U.S. federal deficit and the fragility of the global bond market. The U.S. debt-to-GDP ratio has ballooned beyond 125%, and with interest rates still elevated, the government faces skyrocketing borrowing costs. Dalio warned of a “supply-demand problem for debt” that could overwhelm markets.

He likened the potential fallout to previous systemic shocks: President Richard Nixon’s abandonment of the gold standard in 1971 and the 2008 financial crisis. In this case, the convergence of rising debt, disrupted trade, political division, and global realignment could prove even more severe. Near the end of the interview, he likened America to the era of the early days of the Great Depression, saying “We’re in a period that’s very much like the 1930’s.”

While these issues persist, there’s some practicality standing in the way of making it happen. Dalio notes how most of America's inventiveness comes from the top 1% of workers, who come from Harvard, Yale and other Ivy League institutions. Below that, there’s the 10% of Americans that do well, and support that 1%. But 60% of Americans, Dalio says, only read at a 6th grade level. The concern Dalio alluded to being: Even if American businesses attempt to onshore manufacturing, does American even have the skilled labor needed to fill those roles? 

Tim Cook addressed this in a speech in China several years ago, saying the reason iPhones are made in China isn’t because of the cheap labor costs, but rather the “quantity of skill.”

What This Means for Markets and Small Businesses

For investors, Dalio’s warnings suggest increased volatility ahead — especially in bonds, currencies, and international equities. For small businesses, particularly importers, the message is equally grim: higher costs, more uncertainty, and fewer safety nets. As the global financial structure teeters, Dalio’s remarks are a call not just to policymakers — but to anyone with skin in the economic game — to prepare for a world where the old rules may no longer apply.