Billionaire Ray Dalio outlines the 3 strategies Democrats could use to deal with Biden, the 'emperor who has no clothes'

"It's best to recognize the truth and move on in the best possible way," Dalio said of President Joe Biden's candidacy.

• Ray Dalio thinks the Democratic Party has a huge problem with Joe Biden.
• "I look at this case like the fable of the emperor who has no clothes," Dalio said.
• He outlined three ways the party could deal with Biden before the November polls.

Investor Ray Dalio says the Democratic Party has a big problem with the uncertainty surrounding President Joe Biden's candidacy — and they need to nip it in the bud.

Dalio, the founder of the world's largest hedge fund, Bridgewater Associates, wrote a column for Time magazine published Tuesday. The same article was also posted on Dalio's LinkedIn profile.

"To begin, I want to make clear that I respect, like, and empathize with President Biden and I get that Democrats find themselves in a difficult position," Dalio wrote.

"I look at this case like the fable of the emperor who has no clothes," Dalio added. "I think about what happened when everyone saw that he had no clothes and the lessons the fable provides — that it's best to recognize the truth and move on in the best possible way."

The Democrats, per Dalio, now have three possible courses of action.

First, the party can retain Biden as its nominee, a path Dalio thinks the party has chosen for now — at least publicly.

But Dalio pointed out that this first strategy would likely leave voters "with a loss of trust in the Democrats' straightforwardness and judgment," given the president's advanced age.

The billionaire then suggested two alternative strategies, including a "mini-primary plan" where a select group of candidates battle it out to succeed Biden.

Dalio's other suggestion is a "coronation plan," which would see Vice President Kamala Harris being tapped to take over Biden's spot.

Dalio said he preferred the mini-primary option, which would allow voters to stress-test Biden's replacement — but recognized that this plan would likely hurt the Democratic Party's chances in the election.

"I think that, regardless of which plan they choose, they must acknowledge the problem —that Biden might not be able to serve out his term — and explain how they will deal with that in a detailed way," Dalio wrote.

Representatives for Biden didn't immediately respond to a request for comment from BI sent outside regular business hours.

Calls for Biden to drop out have grown following his disastrous performance in a June 27 debate with former President Donald Trump. Biden's speech was riddled with gaffes and stumbles, which prompted concerns over his mental acuity and fitness.

For now, Biden appears determined to stay in the race. On Monday, he wrote a letter to congressional Democrats reiterating his intention to run and beat Trump.

But some of Biden's colleagues don't appear to share that zeal for his 2024 run.

"It's up to the president to decide if he is going to run," former House Speaker Nancy Pelosi said during an interview with MSNBC's "Morning Joe" on Wednesday.

"I want him to do whatever he decides to do. And that's the way it is. Whatever he decides, we go with," she added.