Bloomberg News: Ray Dalio Issues Stark Warning about U.S. Dollar's Future as Global Reserve Currency

Article by Katherine Burton & Erik Schatzker in Bloomberg News

The dollar’s decades-long position as the global reserve currency is in jeopardy because of steps the U.S. has taken to support its economy during the COVID-19 pandemic, according to Ray Dalio, founder of hedge fund giant Bridgewater Associates.

While equities and gold benefited from the trillions of dollars in fiscal spending and monetary injections, those efforts are debasing the currency and have raised the possibility that the U.S. will go too far in testing the limits of government stimulus, Dalio said Tuesday in an interview with Bloomberg Television.

“There is so much debt production and debt monetization,” Dalio said.

The Bloomberg Dollar Spot Index has dropped 10% from its peak in late March. All of the world’s major developed currencies have gained against the dollar as have precious metals such as gold, silver and platinum.

Dalio said in July that investors should favor gold over bonds and cash because the latter offer a negative rate of return and central banks will print more money. Bridgewater has been moving into gold ...

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