Core Viewpoint - Ray Dalio, founder of Bridgewater, warns that aggressive policies from President Trump may trigger a global capital war, potentially altering the global financial order [1][3]. Group 1: Capital War Concerns - Dalio emphasizes that the possibility of a capital war poses a significant threat, impacting markets and economies broadly [1][3]. - He notes that the ongoing trade conflicts between the U.S. and other regions do not address global imbalances, but they do exert immense pressure on capital flows [1][3]. - There is a growing concern that investors may become less inclined to purchase U.S. Treasury bonds due to diminishing trust in the U.S. [1][3]. Group 2: Debt and Inflation Risks - Dalio highlights the mutual concerns between countries holding dollar-denominated debt and those needing it, indicating a potential crisis if foreign demand declines significantly [4]. - He warns that the U.S. may have to rely on internal measures for funding, which could lead to increased inflation or currency devaluation, further alarming foreign investors [4]. Group 3: Investment Strategy - Dalio advocates for gold as a reserve asset during capital wars, suggesting it should constitute 5% to 15% of a diversified investment portfolio [4]. - He plans to reduce investments in copper while increasing his allocation to gold, holding a higher proportion than usual [4]. - However, he cautions that a strong rise in gold prices could signal potential risks for investors, advising caution regarding the implications for the economy in 2026 [4].