Billionaire investor Ray Dalio warns of “disorderly” era for US economy

Billionaire investor Ray Dalio, founder of Bridgewater Associates, has warned that the global economic order is showing signs of strain, with the United States at risk of entering a “disorderly” period marked by rising deficits, persistent inflation, and declining confidence in its financial system.

Speaking on a recent episode of the “Interesting Times” podcast, Dalio outlined a scenario in which excessive borrowing and money creation could push the US into a financial crisis.

“The financial crisis will mean that the capacity to spend will be very limited,” Dalio said, adding that in such a scenario, the US could struggle to fund both military and social spending. “You'll be very constrained. And because the demand won't meet up with the supply, you'll have interest rates going up, which will curtail borrowing, will hurt markets, and so on.”

He pointed to widening fiscal imbalances as a key concern. In the last fiscal year, the US spent $7 trillion while collecting $5.2 trillion in revenue, according to Treasury Department data.

Dalio said large deficits have historically led to economic “problems,” as governments often respond by printing money to cover costs—an approach that can weaken currencies and fuel inflation.

The likely outcome, he warned, could be a “stagflation kind of environment,” where high inflation coincides with weak economic growth, creating a particularly challenging backdrop for financial markets.

As a hedge against such risks, Dalio said investors should consider allocating between 5% and 15% of their portfolios to gold.

“When we look at history, we see that in all such periods, all the fiat currencies go down, and gold goes up,” he said.

Dalio has long promoted gold as a safeguard against economic instability, arguing that rising deficits and inflation erode the value of fiat currencies and make hard assets more attractive.

He added that current global conditions could ultimately undermine confidence in all major currencies. Last year, he pointed to gold’s sharp rally as evidence that fiat currencies were already under pressure.

Addressing the topic of de-dollarization, Dalio said that while many economists have downplayed the trend, shifts in the global monetary order can occur over time. He cited the historical example of the British pound losing its reserve currency status in the mid-20th century.

Dalio also pointed to geopolitical risks, including the ongoing war with Iran, as factors that could weaken confidence in the US as both an economic and political power. Rising oil prices linked to the conflict have added to inflation concerns.

“We do not know a lot about what the world will look like in three to five years. What we don't know is much greater than anything we know. I think we know that we are in increasingly disorderly times, and these are the greater risks,” Dalio said.

Despite these warnings, demand for US assets has remained resilient. Investment inflows into the United States have increased in recent years, and demand for US Treasurys has held steady, indicating continued confidence in the dollar.

The US Dollar Index, which tracks the greenback against a basket of foreign currencies, rose by as much as 2% earlier this year as investors anticipated higher interest rates. However, it has since eased amid hopes that the conflict with Iran could de-escalate. As of Thursday, the index was trading around 97.85, roughly flat for the year.

By Tamilla Hasanova