“Big, unique things are happening” in a global economy awash with money, Dalio said on a panel in Washington. The impetus of measures such as interest-rate reductions and tax cuts is fading, “but we don’t have a circumstance to cause a classic crash-type event at the end of the cycle.”

Read more: Ray Dalio Says He’s Not Sick, Just Triangulating

“You don’t have the same tightening of monetary policy, you don’t have the same debt rollover,” he said. “But you have a lot of long-term debt maturities and you have a lot of obligations,” such as pensions and health care, “that are a burden.”

“So this cycle is fading and we’re now in the world in what I would call a great sag,” Dalio said on the CNBC-sponsored panel Thursday at the annual meetings of the International Monetary Fund and World Bank.

Capitalist or Socialist

Political polarization is making next year’s election crucial for markets and the U.S. economy, Dalio said.

“It’s really almost a — most likely a capitalist-socialist question” that will have major implications for corporate taxes, he said.

“What we’re seeing in the United States and what we’re seeing around the world is really a greater conflict, with almost more populism of the left and populism of the right, much like the 1930s,” according to Dalio.

Asked about data suggesting that U.S. consumer demand may be softening, Dalio said one reason for slower growth is “that there’s such a large wealth gap,” a disparity that also leads to an education gap that he portrayed as a burden on growth.