Legendary hedge fund manager Ray Dalio has raised fresh concerns over the future of the global financial system, warning that the current monetary order is teetering on collapse, accelerated by escalating US trade tariffs.
In a post shared on X on April 28, the Bridgewater Associates founder said rising trade tensions, especially under the Trump administration’s tariff policies, are fueling deglobalization and creating deep fractures across the world’s monetary, political, and international frameworks.
Dalio emphasized that the growing divide between major economies, particularly the United States and China, is leading to irreversible damage.
“They’re recognizing that whatever happens with tariffs, these problems won’t go away, and that radically reduced interdependencies with the US is a reality that has to be planned for,”
he said, pointing out that businesses no longer see US trade relations as stable or reliable.
He criticized the longstanding assumption that trade partners will continue to accept US dollars in exchange for goods, calling it “naive thinking,” especially as the US continues acting as the world’s biggest consumer and largest debtor. According to Dalio, the current trajectory suggests that more countries will start building new trade alliances that bypass the dollar, possibly relying on alternative currencies.
While he didn’t name a specific alternative to the dollar, Dalio has previously advocated for “hard money” assets like gold and Bitcoin, which are increasingly viewed as hedges during economic turmoil.
Dalio emphasized the need for US policymakers to adopt a strategic approach to global trade issues, warning that ignoring debt and economic imbalances could worsen instability. He expressed concern over the current volatility and conflicts, which may lead to lasting adverse outcomes. Dalio advised both investors and policymakers to prioritize addressing fundamental changes in the global order rather than getting distracted by short-term market fluctuations.
Meanwhile, Trump has indicated that federal income taxes could be “substantially reduced” — or even eliminated — as the country’s sweeping new tariff policies take full effect.
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