The world is facing threats not of a cold war or just a trade war, but a capital war where money is being weaponized, according to billionaire hedge fund manager Ray Dalio. He suggested one asset would be the safest to invest in during volatile times.
“We are on the brink,” Dalio said. “That means not in, but it means we are quite close to [a capital war], and it would be very easy to go over the brink into a capital war, because there are mutual fears.”
“Let’s not be naive and say, ‘Oh, we’re breaking the rule-based system,’” he said. “It’s gone.”
“In reserve currencies, gold is the second largest reserve currency,” Dalio said. He added monetary policymakers would still call gold “the safest money in this kind of environment.”
“Gold is up about 65% from a year ago, and down about 16% from its high,” Dalio said. “I think people make the mistake of thinking, ‘Is it going to go up and down, and should I buy it?’”
“Because gold is a diversifier, when the bad times come along it does uniquely well, and when the good times are prosperous, less so, [but] it’s an effective diversifier,” Dalio said on Tuesday. “I’d say the most important thing is [to] have a well-diversified portfolio.”
