The Chinese think they are on the rise, while America is declining. On GZERO World, Ian Bremmer talks to billionaire Ray Dalio, head of the world's largest hedge fund, who thinks rising US debt, a widening wealth gap among Americans, and the meteoric rise of China all play into Beijing's plans to overtake the US as a global superpower.
Just recently, the US national debt topped $30 trillion for the first time in history, while household debt jumped by $1 trillion, the most since 2007. For Ray Dalio, this rising debt is widening the gap between all the money out there and what it can buy.
Rising debt, in conjunction with long-term high inflation will hurt the US dollar, which in the future might lose its status as the global reserve status to the Chinese yuan, which will become "digital gold." The euro and the Japanese yen are also in similar danger.
Does this mean investors should bet on China over the US? America has a better system, tech and universities Dalio says, but the Chinese "has us outnumbered" in population and pace of per capita income growth.
But while China’s economic growth has been impressive, even during COVID, the pandemic has widened inequality and political divisions in the US.
For Beijing, it's a sign that the East is rising as the West declines.