Wealthy individual issues alert on potential instability in financial structure
In a recent prediction, Ray Dalio, the founder of Bridgewater Associates, has forecasted a strong rally for gold and other non-fiat currencies. Dalio attributes this prediction to rising global debt and excessive government spending, which he believes will lead to an easier monetary policy.
Dalio advises U.S. lawmakers to reduce the deficit to 3% of GDP to prevent further inflation and maintain the value of the U.S. dollar. He identifies the U.S.'s fiscal policy as unsustainable and potentially harmful to the current monetary system.
The increase in gold's value in 2025 was due to inflation concerns, as indicated by the global rush on precious metals in 1979. This market trend could indicate that traditional fiat currencies may no longer be considered the sole safe haven for investors.
The gold market is currently providing impressive arguments for its potential continued growth. Gold has already risen by 40% in 2025, marking the largest annual increase since 1979, according to the gold market. In Germany, the gold price is around 3,126 euros per ounce (approximately $3,683 USD) as of September, showing a strong bullish trend with an annual increase of about 25% in euros. Prices have been rising since April 2025 and are expected to potentially reach up to $4,000 by mid-2026.
Gold mining stocks are performing exceptionally well in the stock market. One such stock service, Goldfolio, has gained around 55% in value since the beginning of the year. Dalio suggests diversification for investors and recommends allocating around 10% of one's portfolio to gold for long-term wealth protection.
Silver and other tangible assets are also benefiting from the current market conditions. A weaker U.S. dollar is contributing to the rise in gold's value, making gold and other precious metals more attractive to investors seeking a hedge against inflation.
However, there is a lack of bipartisan will among U.S. lawmakers to limit the debt, according to the text. To cover a $2 trillion budget deficit, $1 trillion in interest payments, and $9 trillion in debt rollovers, Washington would need to take on an additional $12 trillion in debt, according to Dalio's calculations. This unsustainable fiscal policy could continue to drive the price of gold and other non-fiat currencies higher.
In conclusion, Dalio's warning emphasizes the need for investors to diversify their portfolios now for long-term wealth protection. The gold market is currently providing strong arguments for its potential continued growth, and gold is expected to challenge $4,000 per ounce in the medium term.
