Billionaire investor Ray Dalio says the global financial system is approaching a dangerous threshold, where geopolitical tension could spill directly into capital markets.
Speaking at the World Governments Summit in Dubai, Dalio warns that the world is edging closer to what he describes as a potential “capital war,” driven by growing mutual distrust between major economic blocs.
Dalio stresses that the risk is not hypothetical, but structural, emerging from fears over sanctions, asset freezes and access to capital during geopolitical disputes.
“We are on the brink, that means not in, but it means we are quite close to, and it would be very easy to go over the brink into a capital war. Because there are mutual fears. If you were to take the conflict even over Greenland related to Europeans and the United States, there could be a fear that European holders of US-denominated assets could be sanctioned in a sense. There could be a reciprocal fear on the part of the United States that it could not get the capital or not get the [buyer].”
As the world inches closer to a capital war, Dalio says gold remains the undisputed safe-haven asset.
“Gold is the second-largest reserve currency. I think if people were to make those who are running policies and so on were to say, they would say gold is the safest money in this kind of an environment.”
He emphasizes that gold’s appeal is not about short-term price moves, but about durability during periods of political and financial stress.
“It doesn’t change by the day. Gold is up about 65% from a year ago and down about 16% from its high. And I think people make the mistake of thinking, ‘Is it going to go up and down, and should I buy it?’”
At time of publishing, gold is worth $4,841.
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