Ray Dalio Warns All Fiat Currencies Are In 'Trouble,' Says 'Money Is Debt' and Predicts a Major Devaluation Cycle

Core Insights - Ray Dalio warns that all major fiat currencies are "in trouble" due to unsustainable debt levels [1] - The world is entering a significant currency devaluation period, similar to the 1930s and 1970s [2] - Dalio emphasizes that "money is debt," indicating that fiat currency is a promise to receive payment [2] Debt Dynamics - Governments, including the U.S. with a $38 trillion debt, may be forced to devalue currency to manage liabilities [3] - Dalio states that devaluing money also devalues debt, creating a cycle where raising taxes or cutting spending leads to social unrest [3] - Policymakers are likely to print more money, which dilutes currency value [3] Structural Challenges - The issues are not limited to the U.S.; similar dynamics are observed in the UK and France [4] - The political cost of austerity is high, as evidenced by the UK's instability with four prime ministers in five years [4] - Tax increases and spending cuts are driving wealth away and harming vulnerable populations, leading to inflation as the easier path [4] Shift to Gold - As confidence in fiat currencies declines, central banks are selling debt-based assets and buying gold [5] - Gold is described as the "oldest money" and a non-liability asset, indicating a defensive strategy against currency devaluation [5] Market Trends - The U.S. Dollar Index Spot has decreased by 9.63% year-to-date, while Gold Spot has reached $4,550.11 per ounce, a 67.25% increase over the year [6]