Ray Dalio Says Populism Will Shape Financial Markets More Than Anything Else | Exploring Markets

Ray Dalio Says Populism Will Shape Financial Markets More Than Anything Else

Ray Dalio published a 61-page report about Populism. It's authored by 4 people including Dalio. You can find a link at the bottom of this post to the entire report. The research is massive and deep. But as you read, one thing becomes very clear. Dalio thinks Populism is the greatest threat to the world economy.

He even compares it to moments of world conflict like war and depression:
"Populism is not well understood because, over the past several decades, it has been infrequent in emerging countries (e.g., Ch├ívez’s Venezuela, Duterte’s Philippines, etc.) and virtually nonexistent in developed countries. It is one of those phenomena that comes along in a big way about once a lifetime—like pandemics, depressions, or wars."
He then makes a very bold claim. That populism will impact global economics more than the Federal Reserve or anyone else:
"We believe that populism’s role in shaping economic conditions will probably be more powerful than classic monetary and fiscal policies (as well as a big influence on fiscal policies). It will also be important in driving international relations."
And how does Dalio define Populism? He writes:
"In other words, populism is a rebellion of the common man against the elites and, to some extent, against the system. The rebellion and the conflict that comes with it occur in varying degrees. Sometimes the system bends with it and sometimes the system breaks. Whether it bends or breaks in response to this rebellion and conflict depends on how flexible and well established the system is. It also seems to depend on how reasonable and respectful of the system the populists who gain power are."
If the Populism wave is real, and happening before our eyes, it's worth thinking about what asset classes will benefit most. Or what asset classes you want to pour your money into as an investment. If you have some free time, spend a few minutes (or hours) scrolling through the entire report right here: it's in PDF format on Bridgewater's website.