Ray Dalio Signals Rising Risk of a Capital War — Advises Gold as Insurance

Speaking at a global government summit, Ray Dalio argued the international financial system is approaching a dangerous threshold where states could weaponize access to capital, deploying sanctions, exchange controls and limits on foreign ownership as coercive instruments. He warned that reciprocal measures would fragment markets, create concentrated counterparty exposures and raise systemic risk for cross-border funding. Dalio pointed to recent policy moves and geopolitical tensions as evidence these scenarios are becoming more plausible and said institutions should be rehearsing contingency plans for disrupted market plumbing. He recommended preserving a portion of reserves in physical metals, arguing gold performs a distinct insurance role in episodes of political risk and monetary intervention despite short-term volatility. Supporting that concern, research cited by Dalio shows a concentrated pattern of foreign demand for U.S. Treasurys — with European buyers responsible for a large majority of foreign purchases during a recent multi-month window — highlighting leverage points in global funding. Market signals beyond sovereign debt reinforce the trend: an extraordinary run-up in gold prices and central-bank reserve choices favoring assets less vulnerable to sanction or seizure suggest growing preference for non-sovereign stores of value. At the same time, new institutional flows into digital-asset products and the emergence of on-chain lending markets show that some allocators are testing technology-enabled alternatives that reduce reliance on single custodians, even as U.S. regulatory uncertainty has slowed parts of that build-out. Differences in policy clarity — notably the European MiCA roadmap versus a paused U.S. regulatory billmaking process — are already shaping where firms domicile operations and how rapidly regulated crypto products scale. For investors and policy teams, Dalio’s message is twofold: plan for constrained capital mobility and reassess allocations to assets that preserve optionality if cross-border finance is weaponized. Practically, that means stress-testing liabilities against access restrictions, increasing holdings of non-correlated insurance assets and engaging with policymakers to minimize sudden policy-driven market fragmentation. Market implications include higher volatility in government bond markets, shifts in reserve management and increased demand for safe-haven instruments and custody solutions that resist seizure risk. For governments, the warning highlights the tradeoff between using financial pressure as leverage and the risk of inviting retaliatory limits that disrupt funding access and raise borrowing costs. In sum, Dalio painted a near-term risk environment where economic statecraft could spill into persistent financial fragmentation, and he urged both private and public institutions to adopt practical hedges and contingency plans while monitoring how policy choices will shape which assets become reliable stores of value.