The founder of the world’s largest hedge fund firm alerts the future of the US dollar. Ray Dalio, founder and chief investment officer of Bridgewater Associates, says the US, like past empires, is showing signs of collapse and is facing massive threats to its currency.
In an interview with MarketWatch, Dalio outlines three main issues threatening America and the US dollar: the money and credit cycle problem, the wealth and value gap, and China’s rising power.
Ray Dalio said that the US will need to be restructured substantially in order not to lose its reserve currency status. Dalio used the following statements:
“But if we do not do this engineering well, we will spend it unlimitedly and deal with it by creating a debt that will never be repaid and risk losing the reserve currency status of the dollar.
Why Not Buy Bitcoin (BTC)?
Despite concerns about the dollar’s future, Dalio is not bullish in Bitcoin. In an interview at the World Economic Forum in Davos, Switzerland, Dalio warned people against BTC, saying crypto money does not serve the two main purposes of money. Dalio used the following statements:
“Money has two purposes, one feature of exchange and the other to be held as wealth. Bitcoin is currently not effective in either case. ”
Dalio thinks there will be much more bullish on gold and believes the precious metal could act as a hedge against a potential dollar drop.
The Next 5 Years Will Be Challenging
Ray Dalio believes that the next five years will be extremely difficult for investors. Dalio is not someone you might consider to be a radical idealist, but some of his words require rethinking the norms of capitalism and changing it to make things fair for all. Dalio believes that the current capitalist system is not functioning and could pose increasing difficulties for Americans in the future. Dalio’s five-year forecast is therefore actually important.
The relative position of the United States in the world essentially positions it as a leader. But the situation may worsen as people around the world lose trust in the system, as recent events (Covid-19, elections, etc.) have had a general impact on the economy, markets, and companies operating in the country. If the US dollar loses its position as the world’s reserve currency, significant uncertainties will arise for many investors around the world. Many countries may see a volatile economic landscape similar to the US economy.