Ray Dalio continues to push his thesis that the global system faces a paradigm shift

Bridgewater Associates chief Ray Dalio issued a lengthy warning to the global markets. In a LinkedIn post date November 5, Dalio said that the “World has gone mad and the system is broken” in his title.

Dalio expects that something will give in the global economy. He blames a series of “unsustainable circumstances.” These include free money, ballooning government debts, unsustainable pension and healthcare obligations. He also worries about the increasing gap between the rich and the poor.

Dalio worries that the Fed’s commitment to cheap money raises new threats. He worries that “three major world reserve currencies” could lose their reputations as viable “store holds of wealth.”

Bridgewater Associates Chief on Pension and Liabilities

Bridgewater Associates’ Dalio highlighted the inevitable problems facing pension funds around the globe.

“Right now many pension funds that have investments that are intended to meet their pension obligations use assumed returns that are agreed to with their regulators,” he wrote. “They are typically much higher (around 7%) than the market returns that are built into the pricing and that are likely to be produced. As a result, many of those who have the obligation to deliver the money to pay these pensions are unlikely to have enough money to meet their obligations.”

Finally, Dalio concluded that we are seeing cracks emerge similar to 2008. He further states that the world is “approaching a paradigm shift.”

Meanwhile, this statement echoes previous interviews with Dalio on the subject. In previous conversations, he has touted non-income bearing assets like gold that can perform in low-rate environments.

Related: Ray Dalio: The Fed May Be Running Out of Bullets