Billionaire investor Ray Dalio's big warning for the US, flags potential ‘civil war’ risks. Here's why

Billionaire investor Ray Dalio, known for predicting the 2008 financial crisis, has warned that the US faces a form of “civil war” driven by increasing government debt, significant wealth disparities, and internal chaos.

Dalio, founder of Bridgewater Associates, has warned that increasing political and economic instability in the US could trigger a sort of "civil war", which will not be an armed conflict, but a breakdown in consensus among Americans.

“We have a civil war of some sort which is developing in the United States and elsewhere where there are irreconcilable differences,” Dalio told Bloomberg’s Francine Lacqua in an interview aired on Friday.

A comparison with the Great Depression

The billionaire highlighted rising government debt and growing wealth gaps as signs of economic issues that could trigger more conflicts. He drew parallels between today and 1937 or 1938, when the US faced an economic slowdown during the Great Depression, coinciding with the escalation of global conflicts.

Where does US public debt stand?

According to estimates from the Congressional Budget Office, public debt amounted to 99% of the US gross domestic product last year. That number is projected to reach 116% of GDP in 2034, the highest level in US history, Bloomberg reported.

Debt is a ‘plague in the arteries,’ says Dalio

Dalio compared the rise in national debt to “plaque in the arteries,” which can “squeeze out the spending.”

He had earlier criticised politicians for the growing debt.

The US also experiences a significant wealth gap, with the top 10% owning over two-thirds of the country's wealth, while the bottom 50% possess less than 4%.

“When there are larger wealth gaps and values gaps, then there are greater conflicts,” Dalio said.

Dalio mentioned factors beyond economic issues, including geopolitics, technological progress, and natural disasters, have impacted the US economy.

Will there be another world war?

The billionaire investor denied the possibility of another world war, while highlighting that each sector has its own “war.”

“These conflicts will become tests of power by each side,” He emphasised the importance of staying vigilant to effectively address problems.

“If we don’t worry about these things, then we have greater risks,” Dalio added.

Dalio's earlier concerns

Notably, this isn't the first time Dalio has expressed concerns over rising instability in the US. In May 2024, he highlighted increasing political polarisation in the US, which prevents people from working together to solve issues.

He also warned about a possible economic recession or depression in April, citing market instability resulting from President Donald Trump’s tariffs.

“If you take tariffs, if you take debt, if you take the rising power challenging existing power, if you take those factors and look at the factors - those changes in the orders, the systems, are very, very disruptive,” Dalio said.