Are We On The "Brink" Of a US Civil War?

Hypothetically, if you were the manager of the world's largest hedge fund, and you believed that there was a high likelihood of a potential civil war in the country, where would you recommend moving your money? 

If you are billionaire investor Ray Dalio, the former manager of Bridgewater Associates, the answer is out of the country. Dalio, who relinquished control of Bridgewater Associates in 2022, believes that this year's current election between incumbent Joe Biden and Republican challenger Donald Trump could be one of the most important of his lifetime and serve as a checkpoint to see if the United States economy spins out of control.

His exact estimate is between 35% to 40%.

This seemed inconceivable years ago, but with events such as the Jan 6 Capital Riots unfolding in recent history, could the idea of a civil war be an actual possibility?

Well, a recent movie by director Alex Garland, simply called Civil War, depicted how one would look. Even the american people believe that there is a strong likelihood, with over 41% of voters believing that they will experience a civil war within the next five years. 

When the general public, voters from both sides of the spectrum, seem to think this to be the case, then there may be some reason to worry.

If the one thing our nation can agree on is that we will likely fall into a civil war, that definitely raises some concerns. The November election and the reactions from both sides will play a crucial role in determining whether the US political system can heal itself or if the general public is right in the matter. 

Which US Investments Are Still Attractive

There are two ways to approach investment in US assets. The first approach, led by political scientist Barbra F. Walter, calls for institutional investors to defend democracy through a holistic approach to capitalism by pouring money back into struggling communities left behind by globalization. 

By lifting up damaged communities, it is the right of institutional investors to lift individuals back to hopefulness so that the economy looks forward into the future rather than being susceptible to extremists urging them to burn the system to the ground.

However, investors like Ray Dalio have a different vision. They feel most comfortable investing in the very best parts of the United States. These are parts in which innovation and capitalism still thrive. Industries that dont produce innovation should be divested from and the money allocated should be moved out of the country to jurisdictions that are more stable and attractive.

Ray Dalio looks for foreign countries to invest in that have great balance sheets, earn more than they spend, have internal political order, and are neutral in geopolitical conflicts. Some of these countries include India, Singapore, Indonesia, Malaysia, Vietnam, and some Gulf states. 

Another investor heeding a similar call is Warren Buffet, who just recently revealed a $7 billion stake in Chubb, an American insurance company that famously relocated its operations away from the US and into Switzerland in 2008.