Ray Dalio Warns US Dollar Devaluation May Trigger Gold Standard Comeback: 'History Shows Us That…'

Billionaire investor Ray Dalio has raised concerns about the long-term stability of the U.S. dollar, pointing to historical cycles that could lead the country back to a gold-backed currency.

Ray Dalio Highlights Historic Pattern Of Currency Collapse And Recovery

On Tuesday, Dalio posted a video clip on X featuring his conversation with Carlyle Group co-founder and co-chairman  David Rubenstein, where he discussed a recurring pattern in the evolution of global monetary systems.

"The U.S. dollar used to be backed by gold — and it's not farfetched to think we may be headed there again in the future," Dalio wrote. "History shows us that the same cycles repeat time and time again."

In the video, Rubenstein asked Dalio whether the U.S. would ever return to the gold standard.

Dalio responded: "Presumably that’s right, but not if you watch these cycles that because you have the devaluation, then people feel don’t have confidence in the fiat system."

US Debt, Inflation, And Loss Of Trust Could Pave Way For Gold-Backed Currency

Dalio explained that during periods of high debt, governments tend to print more money, pay off debt with cheaper currency, and eventually see trust erode.

"Nobody wants to hold the devalued currency," he said. "So then they go back and link it again.”

See Also: Federal Reserve Should Do ‘Nothing At All' About The Rising Yields, Says Craig Shapiro: ‘Let The Bond Vigilantes Eat'

Falling Dollar Signals Deeper Trouble For US Debt Holders

In May, Dalio cautioned that printing money to manage growing government debt could silently erode the value of the U.S. dollar, leading to inflation that harms bondholders. Instead of defaulting, the government may repay debt with devalued dollars, causing real losses for investors.

At the time, supporting his concern, Schwab strategist Kathy Jones highlighted a 7.62% drop in the U.S. Dollar Spot Index this year, linking it to policies like tariffs, re-shoring, and widening deficits.

She warned that these factors point to a weakening dollar and an unsustainable fiscal trajectory—validating Dalio's argument that credit risks are far greater than what rating agencies suggest.

Trump's Tariffs And Fiscal Plans Could Fuel Inflation, Warns Wealth CEO

In June, Ross Gerber criticized Donald Trump's economic approach, arguing that tariffs and aggressive fiscal expansion are directly contributing to inflation.

He specifically called out the GOP's "One Big, Beautiful Bill," which includes deep tax cuts and increased government spending on defense, infrastructure, and manufacturing—policies he says will widen the fiscal deficit and drive up national debt.

Gerber warned that such deficit spending could pressure the Federal Reserve to buy government bonds, effectively "printing money," and risking even higher inflation. He stressed that if Trump wants lower interest rates, he should pursue policies that reduce—not increase—inflationary pressure.

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Photo Courtesy: Yee Hui Lau on Shutterstock.com

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.