Ray Dalio, founder of Bridgewater Associates, believes that gold could outshine other assets as global economic pressures mount, particularly from the debt perspective.

The billionaire investor highlighted that the United States and other major economies are carrying unsustainable debt burdens, raising the risk of stagflation.

In an X post on August 8, Dalio noted that the financial system relies on converting debt into money, but current strains suggest there is not enough liquidity to sustain that model.

Against this backdrop, policymakers may turn to weakening the dollar as a tool to manage the situation. However, other major currencies are unlikely to tolerate significant appreciation, leaving global markets in a difficult balance.

Dalio argued that in such conditions, gold stands out as a more resilient asset, positioned to deliver stronger performance relative to both paper money and traditional financial assets.

“That makes the idea of devaluing the dollar relative to other currencies appealing — but the other currencies won’t want much of an appreciation either. That’s one of the reasons I say that gold will be a better performing asset,” Dalio said. 

Gold’s impressive 2025 run

Notably, amid ongoing uncertainty, from recession risks to tariff disputes, gold has been among the strongest performers of 2025. The precious metal has already rallied nearly 40% year to date, with prices holding above $3,600.

On the other hand, Dalio has long warned about the fragility of the economy, often pointing to the rising debt burden. He cautioned that the U.S. is deep into the late stages of what he calls the “big debt cycle,” where high borrowing and ballooning interest obligations create conditions ripe for collapse. 

Without meaningful fiscal adjustments, he cautioned of a looming “debt-induced economic heart attack” within the next three years unless deficits are trimmed to around 3% of GDP.

At the same time, earlier this year, Dalio also raised concerns that aggressive trade policies, specifically tariff-based disruptions, could push the economy dangerously close to recession. 

Meanwhile, he expects the upcoming Federal Reserve interest rate cut to trigger a crash in specific assets.

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