Ray Dalio: The magnitude of the next drop will be epic

Ray Dalio is founder and head of the world's largest hedge fund - Bridgewater Associates. Dalio's success is not accidental, but a result of his qualities and hard work. Therefore, when Dalio talks, the entire investment community listens carefully.
First good news. According to Dalio, the world economy is currently in very good shape.
"The economy is at or close to its best, and I do not see any serious economic risks on the horizon for the next year or two," Dalio said in a statement in a social media website, LinkedIn, on Friday.
Now the bad news ...
"We are afraid that any magnitude of the next downturn, which will come sooner or later when it comes, will produce much greater social and political conflicts than the ones that existed so far," according to the genius investor.
World markets are currently at new peaks after stabilizing over the last eight years, following the financial crisis. Central banks have contributed to a major part of good performance on global stock markets, with interest rates maintained at ultra-low levels, the expert said.
And although the growth began, with Trump's election victory, it was not the only a factor contributing to the strong appreciation of the stock. Good corporate results and prospects for the next quarter were another catalyst to reach new historical highs.
Dalio's fears, however, are that the debts that arise in the system, including pension and health care, can create a slow and steady "squeeze" of the economy and markets. Instead of a sharp shock that can be overcome quickly, Dalio predicts that we will see a "gradual" contraction, which will be the most damaging for people with the lowest income.
Meanwhile, serious financial assessments by US companies, coupled with the 23-year minimum of the VIX index, raise concerns among many investors and analysts that we can see a serious correction of US indices.