Ray Dalio, founder of Bridgewater Associates, says years of low interest rates and quantitative easing have squeezed most of the returns out of assets in the U.S.
“We will have low returns going forward for a long time,” Dalio said in an interview Monday with Bloomberg Opinion columnist Barry Ritholtz for the Masters in Business podcast.
Ray Dalio says he expects low returns on U.S. assets for a "very, very long time."
Dalio said when the next economic downturn arrives, Europe will have a greater challenge because there is no common fiscal union and no unity among nations.
“Europe will probably be the most strained,” Dalio said.
Other highlights from the interview:
- Today’s debt cycle is most reminiscent of the late 1930s, a time of rising populism and growing disparity between the rich and poor. Then and now, governments will have limited ability to deal with an economic downturn, with levers such as low rates and quantitative easing.
- History has shown many examples of a rising power challenging the existing order, and today Dalio sees China playing this role. Its growth gives rise to the possibility of more conflict, and “not to consider or be worried about external conflict would be dangerous,” he said.
- The billionaire said ocean exploration and micro-finance are the most important focus of his philanthropy. Dalio said the book investors should read now is Paul Kennedy’s “The Rise and Fall of the Great Powers.”
Bridgewater is the world’s largest hedge fund firm with about $160 billion in assets. It’s based in Westport, Connecticut.