Billionaire investor Ray Dalio, whose hedge fund laid off several dozen employees this month, said he’s worried about “the soundness of our money” and warns of a U.S.-China “capital war” that would hurt the dollar.
The founder of Bridgewater Associates — the world’s biggest hedge fund firm, according to Forbes – Dalio has a net worth of $18.6 billion. He ranked as the No. 3 highest-earning hedge fund manager in 2019 and has given $768.9 million to philanthropic causes over his lifetime.
Bridgewater manages $160 billion in funds.
Dalio predicted in November that capital wars would mark the next stage in the economic conflict between the U.S. and China, saying that the power struggle could soon evolve into a fight over the dollar’s long-held place as world’s preferred form of exchange, CNBC reported.
Speaking Sunday on on Fox’s “Sunday Morning Futures,” Dalio said he sees the dollar’s stability under threat from the U.S.’s own policies, and conflict with China could expand into a capital war. He laid out a scenario for the next conflict between the two countries and warned that ideological divisions and loose fiscal policy are pushing the U.S. into decline.
In his book, “Capital Wars,” (Bloomsbury 2014) author Daniel Pinto offers an insight into how the East is winning the war for economic supremacy, shaping the new world order and leaving the U.S. and Europe with no choice but to reinvent themselves.
The dollar has fallen to its lowest level in almost two years. The U.S. is endangering the dollar’s stability by being “our own worst enemy,” Dalio said, adding that he was concerned about the “soundness of our money.”
The ICE U.S. Dollar Index, which measures the dollar against a basket of six rivals, reached a 22-month low on Friday and fell lower again on Monday. On March 22, the index hit a more-than-three year intraday high.
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“There’s a trade war, there’s a technology war, there is a geopolitical war and there could be a capital war,” Dalio said.
“If you say by law, ‘Don’t invest in China,’ or even possibly withholding the payment of bonds that the United States owes payment on in China — these things are possibilities and they have big implications, such as for the value of the dollar, because premarket investors are not used to having those things dictated by the government,” Dalio said.
“You can’t continue to run deficits, sell debt or print money rather than be productive and sustain that over a period of time,” Dalio said.
“If we don’t work together to do the sound things, to be productive, to earn more than we spend, to build the stability of our currency and build a good balance sheet, we are going to decline,” he added.
