Ray Dalio says global monetary order ‘on the brink’ of breakdown

Legendary investor Ray Dalio has said the world is “on the brink” of the global monetary order breaking down, which is being accelerated by the Trump administration’s tariff disruptions.

The trade tensions are fracturing the monetary, political and international world orders by fueling deglobalization and unsustainable trade imbalances, Dalio, the former CEO of hedge fund Bridgewater Associates, said in an April 28 X post.

Dalio added that this is leading to irreversible damage, and an increasing number of importers and exporters, particularly between the US and China, are drastically reducing interdependencies and “making alternative plans.”

“[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.”

Dalio said America’s role as the world’s largest consumer of manufactured goods and the largest debt issuer is looking increasingly unsustainable, and the idea that trade partners would continue selling to the US and receive dollars was “naive thinking.”

As a result, more countries may increasingly bypass the US by forming new trade networks that rely on alternative currencies.

While Dalio didn’t suggest which monetary alternative would eat into the dollar’s dominance, he has championed “hard money” assets like Bitcoin (BTC) and gold during times of global uncertainty.

Less fighting, more coordination

The billionaire called for more calm and coordinated action from the US to address the trade imbalances and become more self-sufficient.

Dealing with the US government debt problem head-on would lead to much better results than the “path that we appear to be on,” Dalio said.

“Unfortunately, thus far we haven’t seen the better ways and have instead seen disturbing fighting and volatility that are teaching lessons that are leading to irreversible bad consequences.”

Dalio advised investors and policymakers to redirect their attention away from day-to-day market moves and policy announcements to deal with these “big fundamental changes” in world order.

Related: Bitcoin’s safe-haven appeal grows during trade war uncertainty

China has been hit hardest by the Trump administration’s tariffs, with a 145% duty on all imports, while the US’ neighbors, Canada and Mexico, were slapped with a 25% tariff on most goods. 

Several key Bitcoin mining manufacturing countries, such as Thailand, Indonesia and Malaysia, have also been hit with respective rates of 36%, 32% and 24%, which has already impacted machine imports into the US.

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