Billionaire investor Ray Dalio has issued a stark warning that the global monetary order is nearing a critical breakdown, driven by rising trade tensions, deglobalization, and unsustainable financial imbalances. In a recent statement, Dalio emphasized that the Trump administration’s aggressive tariff policies are accelerating irreversible changes in the global economic system, urging for urgent corrective action.
Global Monetary Order Faces Breakdown, Says Dalio
In an April 28 post on X (formerly Twitter), Ray Dalio, founder and former CEO of Bridgewater Associates, said the world is "on the brink" of a historic monetary disruption.
Dalio argues that escalating trade frictions — especially between the United States and China — are fracturing both economic and political alliances, fueling deglobalization and creating dangerous trade imbalances.
He emphasized that the tariff-driven tensions are forcing countries to "radically reduce interdependencies" with the U.S. and seek alternative economic partnerships, regardless of future policy shifts.
"Whatever happens with tariffs, these problems won't go away," Dalio wrote. "Radically reduced interdependencies with the U.S. is a reality that has to be planned for."
America's Unsustainable Role in Global Trade
Dalio warned that the United States’ current position as the largest consumer of manufactured goods and the largest issuer of debt is becoming increasingly unsustainable.
He criticized the "naive thinking" that trade partners would continue selling goods to the U.S. and accept payments in U.S. dollars indefinitely. Instead, Dalio predicted that more nations will begin bypassing the dollar, forming new trade alliances based on alternative currencies.
While he did not specify which assets or currencies could replace the U.S. dollar, Dalio has previously advocated for "hard money" alternatives like Bitcoin (BTC) and gold as hedges during periods of global financial stress.
Call for Calm and Policy Coordination
Dalio stressed that the U.S. needs a more strategic and coordinated approach to resolve these emerging challenges.
He called on policymakers to tackle the country’s growing debt problem directly and warned that ignoring structural issues could result in irreversible economic damage.
"Thus far, we haven’t seen the better ways and have instead seen disturbing fighting and volatility," Dalio said, noting that this turmoil is compounding long-term risks.
Dalio urged investors and decision-makers to focus beyond short-term market movements and address "big fundamental changes" shaping the global financial system.
Trade War Impact Already Evident
The Trump administration’s tariff policies have already had widespread economic effects:
China: Hit hardest, facing a 145% tariff on all U.S.-bound exports.
Canada and Mexico: Subjected to a 25% tariff on most goods.
Key Bitcoin Mining Nations: Countries like Thailand, Indonesia, and Malaysia have seen tariff rates of 36%, 32%, and 24% respectively, impacting hardware imports into the U.S.
These moves have disrupted global supply chains and accelerated shifts toward alternative trading routes and settlement systems.
