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Ray Dalio: world is in a ‘great sag’ reminiscent of the 1930s

By Francis Jay

Hedge fund behemoth Ray Dalio argues that global slowdown is imminent

American billionaire Ray Dalio has argued that it is now too late for a global economic slowdown to be reversed by the world’s central banks.

Speaking on a panel at the annual meeting of the International Monetary Fund and the World Bank, Dalio observed that the current global economy parallels the 1930s in two key ways.

Firstly the increasing wealth gap: “In the United States the top one-tenth of one per cent of the population has a net worth that is approximately equal to the bottom 90 per cent.”

Secondly the emergence of China: “Like the 1930s, we have a rising power challenging an existing world power in the form of China-US challenges.”

He added that attempts to lower interest rates even further while restarting stimulus in the form of quantitative easing would not arrest a slowdown in the global economy.

He observed: “Europe is at the limitation of that, Japan is (too) and the US doesn’t have much to go on for that.

“This cycle is fading, we are now in the world in what I would call a ‘great sag’.”

Dalio is the founder and Co-Chairman of Bridgewater Associates, one of the largest hedge funds on earth. He has a net-worth of around $18.7bn (£22.2bn), making him the 58th richest person in the world.

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