Ray Dalio warns global monetary order is starting to crack

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Ray Dalio warns global monetary order is starting to crack

Foreign holders, U.S. deficits, and a trust gap in the dollar system

Dalio’s core point was that the incentive structure is changing for the biggest holders of dollars and Treasurys, just as U.S. borrowing remains heavy. He argued that central banks are not holding fiat and government debt “in the same way” they used to, and that last year’s standout move was gold, which outperformed even tech markets. Dalio warned the relationship between the U.S. and its major external financiers is getting strained: Washington keeps issuing debt, while international appetite for absorbing that supply is becoming less certain.

He described the situation as a mutual anxiety loop—countries holding dollars worry about U.S. fiscal behavior, and the U.S. worries about those countries’ willingness to keep buying. Historically, Dalio said, international conflicts often push even allies to reduce exposure to one another’s debt, accelerating reserve shifts. The bigger risk isn’t a single breaking event—it’s a gradual erosion of willingness to fund deficits at scale. In that environment, “harder” assets tend to win by default.

Gold’s surge and Bitcoin’s role as a modern hedge

Dalio reiterated his long-running view that investors should diversify away from pure fiat exposure, recommending 5% to 15% gold allocation in a balanced portfolio. Gold has surged UP more than 70% over the past year, recently topping $4,763 per ounce, reinforcing the idea that capital is already repositioning toward hard assets. Bitcoin is increasingly being pulled into that same conversation, with parts of the crypto market treating BTC as a digital alternative to gold in a world of debt expansion.

Dalio has acknowledged holding a small amount of Bitcoin himself, reflecting how mainstream acceptance has broadened even among traditional macro investors. Institutional comfort is also growing: a Bitwise/VettaFi 2026 survey found 32% of advisors allocated client funds to crypto in 2025, while Bank of America has floated 1%–4% exposure as a portfolio allocation range. The bigger takeaway is that hedging behavior is changing—investors aren’t waiting for a crisis headline to diversify, they’re treating it as a structural shift. And in Dalio’s framework, that’s exactly how reserve transitions begin.

Recently we wrote that JPMorgan Chase CEO Jamie Dimon has pushed back against former U.S. President Donald Trump, warning that his proposal to cap credit card interest rates would cut off access to credit for 80% of Americans.

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