Bridgewater Associates founder Ray Dalio warned Silicon Valley Bank’s failure shows cracks widening in global finance, joining other U.S. billionaires raising the alarm on fallout from the lender’s collapse.

“This bank failure is a ‘canary in the coal mine,’” Dalio said in a newsletter Tuesday. It’s an “early-sign dynamic that will have knock-on effects in the venture world and well beyond it.”

Dalio, 73, built one of the world’s biggest hedge funds through focusing on economic trends such as inflation, interest rates and foreign-exchange rates before giving up control of Bridgewater last year. 

He said SVB’s collapse underscores how the global economy is entering a new era after central banks hiked interest rates over the past year to curb surging inflation. Dalio now expects problems to start mounting in the fallout from contractions in debt and credit markets.

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“It is a very classic event in the very classic bubble-bursting part of the short-term debt cycle,” said Dalio, who has a net worth of US$16.2 billion through the Westport, Connecticut-based hedge fund he founded more than four decades ago, according to the Bloomberg Billionaires Index.

“It is likely that this bank failure will be followed by many more problems before the contraction phase of the cycle runs its course,” he added. “We are approaching the turning point.”

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 U.S. authorities intervening to boost confidence in the nation’s banking system.

“It is classic that coming out of an extended period of very low real interest rates and abundant credit, there is an enormous amount of leveraged long holding of assets that are going down,” Dalio said on the impact of interest rate hikes. That’s “producing this classic dynamic of dominos falling.”