Ray Dalio Warns US Dollar Dominance at Risk as Global Debt Mounts
New York, Tuesday, 20 January 2026.
Dalio’s warning resurfaces as central bank gold reserves surpass US Treasury holdings for the first time since 1996, signaling a critical shift away from the dollar amid rising debt.
The Mechanics of a Breaking Order
On Tuesday, January 20, 2026, Ray Dalio appeared on CNBC to discuss fears of a “capital war,” reinforcing his thesis that the established global monetary order is currently breaking down [3]. This follows his earlier warnings from 2025, where he predicted economic scenarios potentially more severe than a standard recession and comparable to the turmoil of the 1930s [1]. Dalio argues that this shift is driven by a “Big Cycle” comprised of five historical forces: debt cycles, internal conflicts, geopolitical shifts, acts of nature, and technology [1][4]. He asserts that the convergence of these factors is now dismantling the existing fiat monetary and domestic political orders [4].
Trade Tensions and “Rocks in the System”
Beyond fiscal policy, aggressive trade strategies are accelerating global fragmentation. Dalio characterizes the current implementation of tariffs as “rocks thrown into the production system,” arguing that while the goals may be understandable, the execution disrupts global efficiency and invites conflict [1][2]. These disruptions have expanded beyond traditional rivals; new 10% tariffs have been linked to an ongoing dispute regarding Greenland, affecting even traditionally stable Nordic countries [2]. Economists project that these tariff measures, which are expected to peak in early 2026, will curb global economic growth to between 2.7% and 2.9% [1].
The Shift to Gold and De-dollarization
The most tangible evidence of this shifting monetary order is visible in central bank balance sheets. For the first time since 1996, the value of global central bank gold reserves has surpassed their holdings of U.S. Treasuries [1]. In 2026, central bank gold reserves reached nearly $4 trillion, while U.S. Treasury holdings stood at $3.9 trillion [1]. This represents a surplus of 0.1 trillion in favor of gold assets. This pivot signals that central banks are actively diversifying away from the dollar, a trend further evidenced by the rise of “BRICS Pay” prototypes and proposals for linked digital currencies aimed at reducing reliance on the U.S. financial system [1].