Ray Dalio Warns Global Monetary Order Is "On the Brink" of Collapse, Citing Trump's Tariff Policies as Catalyst

Billionaire investor Ray Dalio has issued a stark warning that the global monetary order is “on the brink” of collapse, a trend being driven in part by the current administration’s tariff policies.

In his latest essay, Dalio argued that the world is nearing a breakdown of monetary, domestic, political, and international order due to unsustainable fundamentals, a situation that has unfolded in past historical shifts in global orders.

“The world monetary, domestic political and international order that has been unfolding for the past 75 years is breaking down (as did the 19th century British imperial hegemony and the 1941-45 world war that set the stage for the post-World War II order).

Though not yet fully realized, it is also increasingly being realized that the United States’ role as the world’s biggest consumer of manufactured goods and greatest producer of debt assets to finance its over-consumption is unsustainable, so assuming that one can sell and lend to the U.S. and get paid back with hard (i.e. not devalued) dollars on their U.S. debt holdings is naive thinking, so other plans have to be made.”

These shifts are forcing exporters and importers to drastically reduce their dealings with the U.S., while both American and Chinese producers and investors are actively seeking alternative plans to minimize interdependence.

“Some people believe that the tariff disruptions will settle down as more negotiations happen and greater thought is given to how to structure them to work in a sensible way.

However, I am now hearing from a large and growing number of people who are having to deal with these issues that it is already too late. They are having to drastically reduce their export and import activities and move their operations out of the U.S. and China to third countries in order to avoid the tariffs and other trade restrictions.

Both U.S. and Chinese producers and investors are making plans to reduce their interdependence.”

This trend is becoming broadly recognized across trade, capital markets, geopolitical, and military relations.

As the world pivots towards a multipolar economic landscape, Dalio believes that US hegemony is diminishing, paving the way for a new global order. This shift could further erode trust in the dollar, which is already losing ground amid global economic uncertainty.

While he did not specify which currencies might gain prominence, Dalio has previously advocated for “hard money” assets like Bitcoin (BTC) and gold as hedges.

“I want to steer away from debt assets like bonds and debt, and have some hard money like gold and Bitcoin,” Dalio said during the Abu Dhabi Finance Week (ADFW) in December 2024.

Global Monetary System at Risk: Is Bitcoin the Solution?

The warning has resonated within the cryptocurrency community. Jeff Park, Head of Alpha Strategies at Bitwise, stated that Dalio’s recent comments signal a looming “dedollarization” threat.

Park highlighted that Dalio’s shift from supporting China to acknowledging US economic imbalances suggests the global move away from the US dollar is approaching faster than many anticipate, a concept long recognized by Bitcoin advocates.

“The dedollarization threat is nearer than you and I know,” Park wrote.

Similarly, another expert asserted that the conditions Dalio describes create an ideal environment for Bitcoin. Rex believes these developments could drive Bitcoin to surge significantly within the next 18 months, potentially exceeding market expectations.

This impact is already quite visible as BTC’s value has recovered amid a dropping dollar. Over the past week, it has appreciated by 7.5%. At the time of writing, BTC was trading at $94,985.

In fact, market watchers are increasingly bullish on BTC, predicting higher price targets for the largest cryptocurrency. Last week, ARK Invest raised its BTC price forecast from $1.5 million to $2.4 million by 2030. Meanwhile, experts’ forecasts for BTC range from $150,000 per coin to a more optimistic $1 million by the end of 2025.