ray dalio bridgewaters cochairman and cochief investment officer speaks during the skybridge capital salt new york 2021 conference in new york city us september 15 2021 first ray dalio foresaw the 2008 financial crisis then he predicted years of longterm financial strain on the us economy from the covid pandemic now the 72yearold billionaire investor who built bridgewater associates into the worlds largest hedge fund is warning of a new economic catastrophe on the horizon and he wants you to be prepared i think were at risk of a war with china dalio told cnbc make it during a livestreamed qa on friday largely due to misunderstandings dalio noted that his predictions arent facts hes been wrong before too but he said future catastrophes are inevitable according to historical patterns over the last 500 years in other words if an upcoming uschina conflict doesnt tank the economy something else will heres why he thinks disaster is on the horizon and his top two tips on financially preparing for it why dalio thinks the uschina trade war could get worse in his newest book principles for dealing with the changing world order dalio wrote that american attempts to make china and its culture more american could eventually backfire prompting a conflict that could intensify the two nations trade war which was started by the trump administration in 2018 and has led american companies to cut wages lower profit margins and raise consumer prices a moodys analytics study found that the trade war cost americans at least 300000 jobs in just its first year last year a federal reserve bank of new york study found that the trade war had cost american companies 17 trillion in market capitalization dalios comments about china have prompted recent controversy after telling cnbc last week that chinas human rights policies were akin to those of a strict parent he clarified his comments in a linkedin post i was attempting to explain what a chinese leader told me about how they think about governing dalio wrote i was not expressing my own opinion or endorsing that approach in that post he also expressed hope that the us and china could back away from the precipice of conflict what i think and what bridgewater does are of minuscule importance relative to the rapidly growing risk of us war with china he wrote i hope that thoughtful attention will be paid to that issue and that mutual understandings will increase and inclinations to fight will diminish his first tip assess your financial risks regardless of what happens dalio said on friday he has a simple principle for approaching future events if you worry you dont have to worry and if you dont worry you have to worry worrying he said prompts you to take a close look at your own personal risks and encourages you to take action on them one risk for example could be location meaning the physical place where you live and work dalios book contains a health index that rates roughly a dozen nations on 18 factors like debt burdens military strength and economic output its intended as a resource for readers to assess risks and form strategies on where to live and invest and according to forbes he plans to launch a website housing realtime versions of the data moving is of course often a hassle but dalio said its worth considering under financially worrying circumstances flexibility is key he added similarly he advised measure your financial risks in inflationadjusted terms instead of todays dollars if you have cash in a savings account for example its probably accruing value at a different rate than your other investments since its being taxed by inflation but that doesnt mean you should exclusively choose other investments over a savings account or vice versa amid chaotic times dalio said you need your emergency savings to be funded by a safe welldiversified portfolio his second tip save and diversify your portfolio