Ray Dalio Warns Of 1970s-Style Currency Shock: All Fiat Money Will 'Go Down' As Gold Becomes 'Second Largest Reserve Currency' Behind The Dollar

Core Insights - Ray Dalio warns of a significant shift in the global monetary order, highlighting gold's rise as the second largest reserve currency after the US dollar [2][4] - Dalio draws historical parallels to the 1930s and 1970s, indicating that current fiat currency devaluations resemble those periods [3][5] - He emphasizes the potential for "very, very dark times" for major Western economies due to mounting financial liabilities and high national debts [5][7] Group 1: Currency and Economic Outlook - Dalio states that all fiat currencies are likely to decline together, suggesting a systemic risk in the current monetary framework [2][3] - He points out that the current situation mirrors past economic crises, particularly the Nixon shock and the Great Depression, where currencies fell against hard assets like gold [3][4] - The appeal of hard currencies, particularly gold, is reaffirmed as a safe asset in the face of potential economic turmoil [4] Group 2: Debt Concerns - Dalio highlights the alarming $37.5 trillion debt of the United States, warning that it could lead to a financial crisis [7] - He mentions the issue of declining demand for U.S. debt due to massive annual interest payments, which creates imbalances in the market [7] - Earlier, he referred to a "debt-induced heart attack" for the U.S. economy, attributing it to years of significant deficits [6]