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Ray Dalio Issues DIRE Warning About SVB Collapse


The inflation caused by the Federal Reserve was never transitory and the collapse of Silicon Valley Bank is not industry specific. …

As the old Buddhist adage goes: “everything is connected”, and I am not alone in expressing this sentiment.

According to Ray Dalio, the collapse of SVB is a “canary in the coal mine,” portending a broader, systemic financial collapse that mirrors the 2008 crisis.

The financial system is completely interconnected. Venture capitalists may focus on a specific industry or they might not,  venture capitalists, in turn, have whole networks of investors and investments propping up their own interests. …

Likewise, the firms and companies they invest in may also have external investments elsewhere.

In other words, a domino falling anywhere can affect everywhere, all at once.

As we speak, the current financial crisis is only deepening; Silicon Valley’s former parent company, SVB Financial Group has filed for Chapter 11 bankruptcy protection.

The internet was divided on whether or not to agree with Dalio’s warnings and predictions, with some believing that we are heading into a deep recession, but not a complete financial collapse.

Still, others seemed to agree with Dalio in lockstep—calling his recent comments obvious.

The Epoch Times shared some of Dalio’s insights:

In this cycle, tightening monetary policy leads to a self-reinforcing contraction in debt and credit, culminating in a financial crisis, according to Dalio. The SVB collapse signifies the beginning of the contraction phase of the current cycle.

“Based on my understanding of this dynamic and what is now happening (which line up), this bank failure is a ‘canary in the coal mine’ early-sign dynamic that will have knock-on effects in the venture world and well beyond it,” he wrote.

According to Bloomberg:

BlackRock Inc. Chief Executive Officer Larry Fink struck a similar tone to Dalio in a letter on Wednesday, warning that some banks may need to pull back on lending to shore up their balance sheets and that regulators are likely to impose stricter capital standards following SVB’s collapse.

Pershing Square Capital Management founder Bill Ackman has also said in the past few days that more banks will likely fail despite US authorities intervening to boost confidence in the nation’s banking system.


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