Investor who predicted 2008 financial crash shares fears over crisis 'worse than a recession' after Trump's tariffs

A hedge fund founder has warned 'this sort of breakdown' in the US has happened 'many times in history' and 'repeats over and over' following the stock market dropping amid Trump's tariff war.

A day after announcing 'Liberation Day' for the US, Donald Trump's tariffs led to the stock market plummeting $2 trillion in just 25 seconds.

The POTUS' signing of an executive order with 'catastrophic' tariffs on the US' trading partners led to global stocks dropping so drastically that the US dollar decreased to a six-month low.

And even influencer Adin Ross - who gifted Trump a Rolex no less - spoke out about feeling the pinch, revealing he's lost a whopping 'eight figures'.

Investor and founder of the hedge fund Bridgewater Associates Ray Dalio has since weighed in on the US' financial future.

Dalio told NBC News during its 'Meet the Press' segment he thinks 'right now' the US is 'at a decision-making point' and 'very close to a recession'.

And not only that, but the investor is 'worried about something worse than a recession if this isn't handled well'.

Why? Well, in a post to Twitter, he said it's not just about the tariffs.

While not denying the tariffs have 'very big impacts on the markets and economies', Dalio noted that 'very little attention is being paid to the circumstances that caused them and the biggest disruptions that are likely still ahead'.

The stock market plummeted shortly after Trump unveiled the tariffs ( TIMOTHY A. CLARY/AFP via Getty Images)

He continued: "The far bigger, far more important thing to keep in mind is that we are seeing a classic breakdown of the major monetary, political, and geopolitical orders. This sort of breakdown occurs only about once in a lifetime, but they have happened many times in history when similar unsustainable conditions were in place."

Reflecting on the times being 'very much like the 1930s' in terms of the 'domestic' and 'world order,' Dalio told NBC he's 'studied history' and 'this repeats over and over again'.

So, a recession 'or worse' could ultimately result from not only the tariffs but the similarly 'disruptive' 'rising power challenging the existing power' and 'existing debt'.

In his post to Twitter, he added that factors such the 'domestic political order,' 'acts of nature (droughts, floods and pandemics)' becoming 'increasingly disruptive' and 'amazing changes in technology' also come into it all.

Doubling down, the expert warned: "How that's handled could produce something that is much worse than a recession."

But is there a way for a recession or worse to be avoided?

Is the US headed for a recession? (SAUL LOEB/AFP via Getty Images)

Well, Dalio advised Congress to reduce the budget deficit to three percent of the gross domestic product.

He resolved: "If they don't, we're going to have a supply-demand problem for debt at the same time as we have these other problems, and the results of that will be worse than a normal recession."