Legendary macro investor Ray Dalio is sounding the alarm at the 2026 World Economic Forum.
at the World Economic Forum in Davos, Switzerland, billionaire Ray Dalio opined that the current monetary order is breaking down. "The monetary order is breaking down. What I mean by the monetary order is that fiat currencies and debt as a store hold of wealth is not being held by central banks in the same way.
And that there was a change," Dalio said.Dalio argues that the geopolitical friction seen in recent years has escalated beyond simple tariffs. He believes that we are entering a phase of"capital wars," where the U.S. dollar’s dominance is threatened because foreign nations are becoming reluctant to hold American debt.Morning Crypto Report: $74.68 Million XRP Bull Makes Brutal Mistake, Bitcoin Briefly Hits $0 On Decentralized Exchange, Shiba Inu Delivers 5,407,865% Liquidation Shock: What Happened?U.Today Crypto Review: XRP's Biggest Price Bounce, Shiba Inu Still Fighting, Is Ethereum Eyeing Third $3,500 Breakout? "Let's just look at the fact that on the other side of trade deficits and trade wars, there are capital and capital wars. We know that both the holders of US dollar-denominated debt, which is money, and those who need it are worried about each other. If you have other countries that are holding it and they're worried about each other, and we're producing a lot of it, that's a big issue."He further warns that this reluctance to buy U.S. debt isn't just a theoretical risk but a market reality that demands immediate attention. "You can't ignore the possibility that capital wars—in other words, maybe there's not the same inclination to buy US debt. We at least need to talk about those possibilities and find out who is buying and selling what, and what is behind these market movements.", the"smart money" has already begun to front-run this pivot. He points out that gold outperformed the tech sector last year, specifically because sovereign entities are aggressively accumulating it. "The biggest market to move last year was the gold market, far better than the tech markets and so on. The US markets underperformed foreign markets because of the factthat you could see it in the numbers of the central banks." Debt becomes a liability rather than an asset when there is geopolitical uncertainty. Even allied nations are waking up to the counterparty risk inherent in holding another nation's bonds. "When you have a certain amount of debt... and that means others are holding it as debt assets, such as bonds... and you have to sell a lot more, there's a supply-demand issue. Also, when they're holding that, they have to believe in that in terms of the supply and demand. And when you have conflicts, international geopolitical conflicts, even allies do not want to hold each other's debt. They prefer to go to a hard currency. This is logical, and it's factual, and it's repeated throughout history."
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