Bridgewater Institute founder Ray Dalio speaks on CNBC’s Squawk Box at the World Economic Forum in Davos, Switzerland on January 20, 2026.
Oscar Molina CNBC
Legendary investor Ray Dalio warned Tuesday that the world is on the “brink” of a capital war as geopolitical tensions rise and capital markets become unstable.
Speaking with CNBC’s Dan Murphy on stage at the World Government Summit in Dubai, United Arab Emirates, Dalio said we are moving closer to the realm of capital wars, where money is weaponized through means such as embargoes, cutting off access to capital markets, or using debt ownership as leverage.
“We are on the brink,” Dalio said. “It means we’re not participating, but it means we’re pretty close[to a capital war]and it would be very easy to cross the brink of a capital war because there’s mutual fear.”
He pointed to recent tensions over the Trump administration’s efforts to bring Danish Greenland under Washington’s control.
He warned that there was “fear” of sanctions among European holders of US-denominated assets, adding: “There could be a reciprocal fear of not being able to get capital on the US side or not being able to get an acquisition (from Europe).”
European investors accounted for 80% of foreign purchases of U.S. Treasuries in the April-November period, according to a Citi study cited by Reuters.
“Capital, money matters,” Dalio said Tuesday. “We’re looking at capital controls… that are happening all over the world today, but it’s questionable who will experience them. So we’re on the brink. It doesn’t mean we’re in a capital war1770167118but it does mean it’s a logical concern.”
Since returning to the White House last year, U.S. President Donald Trump has imposed a wide range of punitive tariffs on trading partners and political opponents, as well as withdrawing from them. These decisions caused instability in financial markets.
Dalio added that historically capital wars have introduced measures such as foreign exchange and capital controls, and said institutions such as sovereign wealth funds and central banks are already “equipped” to prepare for such regulations.
Dalio noted that historically, capital wars have revolved around “large-scale conflicts.” He said the United States imposed sanctions on Japan as the two countries’ “adversarial relationship” intensified in the run-up to the United States’ entry into World War II.
“In our world today, we might imagine a similar situation between China and the United States, or even the speculation and talk of dependence between the United States and Europe by national leaders. Because the flip side of trade deficits is capital… and there is an imbalance of capital, and capital can be used for war.”
Gold remains a top hedge
Amidst these tensions, gold Dalio said it’s still a great place to store money, even after a historic crash in precious metals prices across the board. By Tuesday, gold and silver showed tentative signs of recovery.
Asked if recent price movements cast doubt on whether gold is the safest place to store capital, he said: “That hasn’t changed day by day.”
“Gold is up about 65% from a year ago and is down about 16% from its all-time high. I think people have a misconception: Is gold going up or down, should I buy it?” Dalio said.
“Instead…a central bank or a government or a sovereign wealth fund should say, “What percentage of my portfolio should I hold in gold, and should I maintain a certain percentage, because it’s a very effective diversifier into other poorer parts of the portfolio.”
“Gold is a dispersant, so it’s a uniquely effective dispersant in bad times, and to a lesser extent (but) an effective dispersant in good times,” Dalio added. “I think the most important thing is to have a well-diversified portfolio.”
