Investor Ray Dalio estimates the corporate losses in the US from coronavirus will top $4 trillion

Investor Ray Dalio said the U.S. corporations will lose as much as $4 trillion due to the economic damage from the coronavirus outbreak.

“What’s happening has not happened in our lifetime before … What we have is a crisis,” Dalio said on Thursday on CNBC’s “Squawk Box.”There will also be individuals who have very big losses… There’s a need for the government to spend more money, a lot more money… A lot of people are going to be broke.”

Dalio added the fiscal stimulus package should be $1.5 trillion to $2 trillion as a minimum, depending on the form of the financial relief such as loan guarantees and credits.

The White House is proposing a stimulus package worth anywhere from $850 billion to more than $1 trillion to fight the impact of COVID-19 and that could help soften the blow of a sudden recession. The package will include direct payments or tax cuts and small business assistance.

The founder of Bridgewater Associates also estimated the global corporate losses will amount to $12 trillion due to the pandemic.

On the monetary front, the Federal Reserve announced it plans to pump an additional $1 trillion into the U.S. economy through asset purchases and cut the federal funds rate to zero. Global central banks have also taken steps to keep borrowing cost in check as countries get ready to ramp up spending to offset coronavirus impact.

However, Dalio said there’s an “inability of central banks to stimulate in a way that’s normal,” adding they have less capacity to ease monetary policies when interest rates have already hit the floor.

“We are now at a point where there will have to be a debt restructuring and a monetization of that,” Dalio said. “We’re living in a different world like the 1930s in which 1930s, 1932 you have a devaluation of the dollar. You have the printing of money.”

Bridgewater, the world’s biggest hedge fund, has about $160 billion assets under management, according to its website.

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