Ray Dalio in Davos: The Shifting World Order
Ray Dalio, founder of Bridgewater Associates and the Dalio Family Office, recently gave an interview in Davos, Switzerland at Axios House and some of the insights he shared were particularly interesting for anyone wondering what was actually behind the unprecedented moves we have been seeing in the markets, including in gold and silver of late. As he sees it, and as we at BFI are inclined to agree, this is just a small part of a much bigger shift.
Dalio, referencing his famous "five big forces" that shape economies, markets, and the changing world order, sees distinct parallels with other historical cycles. He believes the cracks in the monetary order are too obvious to ignore: debt levels are unsustainable, and have been for a while, and faith in the system is diminishing. At the same time, there are serious internal conflicts in most advanced economies, while the global geopolitical power balance is also shifting away from the US-centric model of the last decades.
He went on with his belief that acts of nature continue to play a pivotal role, as they have done throughout human history. “Floods, droughts and pandemics have killed more people than wars”, as he points out, so it is no wonder that the full impact and the aftermath of the covid crisis are still part of the equation.
Finally, Dalio highlights the importance of technology and the AI race: "Whoever wins the technology war will win the military and geopolitical war. They're going to win the economic war." He argues that technological dominance will define the next era of global leadership.
Perhaps the most striking portion of the interview was Dalio’s explanation of how distorted asset performance can appear when viewed through the lens of a weakening currency. "If you were in Switzerland and you're looking at the returns of American stocks and bonds, it would look very different than if you were an American looking through a dollar lens... If you depreciate the money, it makes everything look like it's going up”, meaning that the “record breaking rally” in US markets is arguably a mirage. What we are really seeing is not the growth of the US economy, but the death of the dollar.
All of this helps define gold’s historic rise: a crisis of faith not just in the USD, but in fiat currencies in general. As Dalio puts it: “Don’t think of gold as a metal that there's a speculative market in. Think about it as a money that central banks treat as a money. It's the second largest reserve currency.”
As debt burdens swell, geopolitical alliances shift, technology accelerates, and monetary stability weakens, Dalio’s message is clear: we are in the middle of a profound structural shift. And in such times, gold reliably returns to its original purpose—not speculation, but money.
Watch the full interview here.
