Ray Dalio, founder of Bridgewater Associates, delivers a speech wealthKamal Ahmed issued a stern warning to global leaders and business executives at the World Economic Forum in Davos, Switzerland: Stop pretending the old rules still apply. In a candid assessment of the current geopolitical landscape, Dalio argued that the fate of the post-World War II global order is a contentious issue — much debated amid President Donald Trump’s pursuit of Greenland and unease in the NATO alliance.
“Let’s not be naive and say, ‘Oh, we’re breaking the rules-based system,'” Dalio said. “Gone.”
The billionaire founder of the largest hedge fund in history added that as a student of financial history, he paid close attention to economic cycles over the past 500 years and found that cycles repeated themselves over time.
“What I learned through this exercise is that the same things happen over and over again,” he said. “To me, it’s like a movie. It’s like watching the same movie.”
According to Dalio, five specific forces interact to drive the film’s plot, with the “money-debt cycle” acting like a MacGuffin to kick off the story. Dalio explained that the current instability is rooted in monetary decisions made over the past few decades. Dalio pointed out that since the United States broke the dollar’s link to gold in 1971 under President Richard Nixon, governments have chosen to “print money” rather than let debt crises occur naturally. This behavior occurs when debt service expenses grow faster than revenue growth, squeezing spending. He believes that after more than half a century of this situation, the world is now witnessing a “collapse of the monetary order,” as evidenced by central bank changes in reserves and gold purchases.
The day before, Dalio said on CNBC:scream boxSpeaking on the sidelines of the annual meeting in Davos, fiat currencies and debt as storehouses of wealth “are no longer held by central banks in the same way.” He noted that U.S. markets have lagged foreign markets on specific indicators, a trend that is visible in the changing balance sheets of global central banks.
At the heart of Dalio’s focus is the shift from trade disputes to what he calls “capital wars.” He mentioned that U.S. Treasuries have been the cornerstone of global reserves for decades, but now, Dalio said, the sheer supply of U.S.-issued bonds is conflicting with the shrinking global appetite for holding bonds.
“There’s a supply and demand issue,” Dalio noted. “You can’t ignore the possibility that … maybe people don’t have the same willingness to buy U.S. debt.”
This reluctance is driven by geopolitical frictions. Dalio said that in times of international conflict, “even allies don’t want to hold each other’s debt,” preferring instead to move capital into hard currency. This shift has forced issuers of debt to monetize it, a phenomenon that Dalio summed up bluntly: “We are increasingly buying our own money. That’s… the lesson of all this.”
As Dalio spoke on Monday, markets withstood the test Global sell-off They are digesting news that President Donald Trump is demanding that the United States take possession of Greenland in retaliation for not receiving the 2025 Nobel Peace Prize. According to reports confirmed over the weekend, he had texted Norwegian Prime Minister Jonas Gall Storr to express his anger, even though the Nobel Prize committee operates independently of the Norwegian government. But Dalio’s comments on Tuesday came as markets were calm and Trump reiterated his demand for Greenland but clarified that he would not authorize the use of force to obtain it.
Dalio tells us that this economic instability leads directly to the breakdown of political norms wealth Wednesday. He argued that the multilateral world order established in 1945 (represented by institutions such as the United Nations and the World Trade Organization) was arguably a “naive system” from the outset because it relied on representation without guarantees of enforcement.
“What happens when the dominant force doesn’t want to comply with the vote?” Dalio asked. “Do you really expect a U.N. vote or a World Court to resolve these issues?”
The result, he believes, is a clear shift from a multilateral system to a unilateral one. Dalio proposed that the central question of our time has become: “Who makes the rules, who enforces them, and how do you deal with that?”
Perhaps the most chilling aspect of Dalio’s analysis is the violent erosion of legal authority. “Power is more important than law,” he said wealthnoted that the conflict increasingly hinges on who controls the military, police and National Guard. This trend is evident not only internationally but also within countries, where democracy is threatened by populism and a growing belief that the system is corrupt.
Asked whether such a rupture would frighten corporate boards and CEOs who have long relied on stable global rules, Dalio responded that it was far more dangerous to ignore the facts.
“I think what always scares me is the lack of realism,” he said.
Dalio recommended that leaders stop relying on a rules-based system and instead focus on “jurisdictional issues” and find places where people are “like-minded” and supportive of each other. Whether dealing with international borders or domestic regulations, Dalio insists businesses must now face the stark reality that the era of guaranteed legal protections is ending.
“Will the law prevail?” Dario asked. “Internationally, everyone has to deal with this issue.”
Dalio emphasized that as confidence in institutions, the law itself, and legal obligations weaken, CNBC Gold’s quiet but remarkable recovery. He stressed that gold should not be viewed merely as a speculative asset, but as the world’s “second largest reserve currency.” He noted last year that gold was the “most volatile market” and had performed far better than technology stocks as central banks diversified their assets. JPMorgan CEO Jamie Dimon made similar remarks at a conference interview wealth Speaking at the Most Powerful Women conference in October, he said for the first time in his life that holding gold in a portfolio had become “semi-rational”.
Dalio’s perspective isn’t entirely defensive, however. He said he saw the current era as one divided between a decadent monetary order and a “wonderful technological revolution,” echoing Trump’s comments on stage earlier in the day about the “economic miracle” taking place. At least in this regard, the right choice may finally be made.
This story was originally published on wealth network