The Blubber

There's now a 50% chance of world war as the Israel-Hamas conflict threatens to spread, Ray Dalio has said.

"In my opinion, this war has a high risk of leading to several other conflicts of different types in a number of places, and it is likely to have harmful effects that will extend beyond those in Israel and Gaza," the veteran investor who's also a financial historian wrote in a LinkedIn post on Thursday titled "Another Step Toward International War."

"Primarily for those reasons, it appears to me that the odds of transitioning from the contained conflicts to a more uncontained hot world war that includes the major powers have risen from 35% to about 50% over the last two years," he said.

"If they spread to other countries, most importantly the major countries, there will be a much more horrific hot world war," he said. "It seems to me that the Israel-Hamas war is another classic, unfortunate step toward a more violent and encompassing international war."

Dalio said: "My more attainable stretch goal would be for the US and China to jointly broker peace in Ukraine," he said.

He said: Based on the perspective I have gained from studying history and from my over 50 years of experiences betting on what’s likely to happen, it seems to me that the Israel-Hamas war is another classic, unfortunate step toward a more violent and encompassing international war. In other words, it’s part of a larger war dynamic. Anyone who has studied history and is watching what is going on should be concerned about 1) these conflicts moving from being contained to being all-out brutal wars that continue until the other side is clearly defeated, and 2) these conflicts spreading to involve more countries. In order to gain perspective on how these pre-war stages in the Big Cycle unfold, I suggest that you study other pre-war periods, such as those in the two years prior to World War I and II in both Europe and Asia. What is happening now sure looks a lot like that.