Ray Dalio Warns of Imminent Capital War and Identifies Gold as Safest Asset
New York, Friday, 6 February 2026.
Speaking in Dubai this week, Bridgewater founder Ray Dalio warned that weaponized financial policies are pushing the global economy toward a “capital war,” citing gold as the only reliable safe haven against potential asset freezes.
The Mechanics of a Capital War
The warning, delivered by Ray Dalio at the World Governments Summit in Dubai on Tuesday, 3 February 2026, marks a significant escalation in rhetoric regarding global financial stability [1][2]. Dalio defines this looming “capital war” not merely as diplomatic friction, but as a structural breakdown where nations weaponize their financial systems through sanctions, asset freezes, and the restriction of access to capital markets [5]. He argues that the global economy is transitioning from a rule-based order to one defined by mutual fears, creating a precarious environment for international investors [2]. According to Dalio, this shift is analogous to the United States freezing Japanese assets during World War II, a historical precedent that underscores the severity of current geopolitical maneuvers [2][5].
The Geopolitical Trigger: US-Europe Tensions
A primary driver of this instability is the deteriorating relationship between the United States and its traditional European allies. Dalio highlighted that recent tensions, specifically exacerbated by President Trump’s threats regarding Greenland, have created a climate of “reciprocal fear” [2]. European investors are increasingly concerned that their US-denominated assets could be sanctioned, while the United States faces the corresponding risk of losing access to vital foreign capital [1][5]. This interdependence is critical; between April and November 2025, European investors accounted for 80% of all foreign purchases of US Treasuries, making any disruption to this flow a systemic threat to American liquidity [2][5].
Institutional Exodus from US Debt
The friction has already translated into tangible market movements, with significant institutional players retreating from American debt. Following the geopolitical discord and a probe into Federal Reserve Chair Jerome Powell on 11 January 2026, markets entered a “sell America” mode [2]. Consequently, major pension funds have begun to divest. On 20 January 2026, the Danish fund AkademikerPension confirmed it would exit US Treasuries entirely by the end of the month, followed by the Swedish fund Alecta cutting its holdings on 21 January 2026 [2]. These exits suggest that Dalio’s warning of a capital war is lagging behind a trend that institutional asset allocators are already acting upon.
Gold as the Strategic Hedge
In this fractured landscape, Dalio identifies gold as the “safest money,” emphasizing its status as the world’s second-largest reserve currency [1][4]. He argues that unlike fiat currencies, which are vulnerable to political weaponization and debt monetization, gold offers durability during periods of systemic stress [1]. While the metal has seen volatility—trading at $4,841 at the time of publishing [1] after hitting an all-time high of $5,608.35 in January 2026 [4]—Dalio insists investors should look beyond short-term price fluctuations. The asset has experienced a correction of -13.682% from its peak, yet it remains up significantly year-over-year [1].