Bridgewater Fund Founder Dalio: The World Is on the Edge of a "Capital War"

　　Against the backdrop of escalating geopolitical tensions and intense volatility in capital markets, legendary investor Dalio issued a warning on Tuesday, stating that the world is standing on the brink of a “capital war.”

　　Dalio noted that the world is already close to the red line of a capital war. A capital war refers to the weaponization of currencies, including measures such as imposing trade embargoes, restricting access to domestic capital markets for other countries, or using debt holdings as bargaining chips.

　　“We are at a critical point,” Dalio said. “This means that a capital war has not officially broken out yet, but we are very close to it. The situation can easily spiral out of control and slip into the abyss of a capital war because all parties harbor apprehensions.”

　　He also mentioned that the recent attempt by the Trump administration to bring Greenland, a Danish territory, under U.S. control has further intensified geopolitical tensions.

　　Dalio warned that European investors holding dollar assets fear they may be sanctioned; correspondingly, the U.S. is concerned it may not be able to access European capital or receive purchasing support from Europe. The mutual fear is keeping both sides in check.

　　According to research data from Citigroup, between April and November last year, European investors accounted for 80% of total overseas buyers of U.S. Treasury bonds.

　　“Capital and currency are the key,” Dalio emphasized in Tuesday’s interview. “We can now see that capital control measures are being implemented globally, but it is still unclear who will ultimately be affected by these actions. So, we are on the dangerous edge—this does not mean a capital war has started, but it is certainly a reasonable concern.”

　　Since returning to the White House last year, President Trump has frequently imposed punitive tariffs on trading partners and political opponents, only to revoke them multiple times afterward. These capricious decisions have already triggered significant volatility in financial markets.

　　Dalio added that, based on historical experience, capital wars are often accompanied by the introduction of foreign exchange controls and capital controls. He also pointed out that institutions such as sovereign wealth funds and central banks have already started “preparing in advance” to cope with possible future control measures.

　　Dalio mentioned that, looking back on history, capital wars often revolve around “major conflicts.” Taking the period before the U.S. entered World War II as an example, tensions between the U.S. and Japan were high, and the U.S. escalated the conflict by imposing sanctions on Japan.

　　“It is entirely foreseeable that today’s world could face similar situations. In fact, many national leaders are also discussing the issue of interdependence between Europe and the U.S.—after all, the flip side of a trade deficit is essentially an imbalance in capital flows, and this state of capital imbalance can easily be weaponized in times of war.”

　　Gold Remains a Top Hedge Tool

　　Dalio stated that, despite a historic sell-off in precious metals and a broad decline in prices, gold remains the best store-of-value asset. As of Tuesday, gold and silver prices had already shown initial signs of recovery.

　　When asked whether recent price fluctuations would undermine gold’s status as a “safe haven for capital,” Dalio responded: “Gold’s property as a store of value does not change with daily price swings.”

Editor: Li Tong