Bridgewater Founder Warns! If the conflict between China and the United States escalates into a capital war, it may seriously damage the value of the US dollar.

Bridgewater Associates founder Ray Dalio stated that the escalating tensions between China and the United States could potentially lead to a capital war. On the other hand, the Federal Reserve continues to borrow and print money without a recovery in productivity, actions that could seriously undermine the stability and dominance of the US dollar.

US-China Capital War

Ray Dalio, the founder of the world's largest hedge fund Bridgewater, recently pointed out on FOX's "Sunday Morning Futures" that the escalating conflict between the United States and China is laying the groundwork for further confrontation between the two countries. Dalio stated that the conflict could evolve into a trade war, a technology war, a geopolitical war, and even potentially a "capital war," which would severely damage the value of the US dollar.

"It is possible that there will be laws that say 'you can't invest in China' or even 'we won't pay our debts to China,' and if that happens, it will have a significant impact on the value of the US dollar."

According to Bloomberg data, over the past three months, the US dollar has been declining against all major currencies tracked by Bloomberg. Dalio emphasized that the United States has become its own biggest enemy, threatening the stability of the US dollar.

"What concerns me the most right now is the soundness of the US dollar. We shouldn't be running financial deficits, selling debt, or printing money when productivity is not stable."

Dalio stressed that if Americans don't collectively do the right thing, such as increasing productivity, earning more income than debt, establishing currency stability, and balancing asset sheets, then the US dollar will lose its dominance.

Rise of Non-Sovereign Assets

As a virtual non-sovereign asset, meaning an asset not controlled by external forces such as power or politics, Bitcoin was created to address this situation. Created during an era of malignant inflation, Bitcoin has a total limit of 21 million coins, and its initial settings are ensured through blockchain systems and cryptographic principles, making it impossible for any third party to intervene. If the US and China attempt to intervene in the capital markets with political power to weaken the other's economy, it may prompt funds to withdraw from these countries and move to non-sovereign assets like gold or Bitcoin.

Currently, gold is surging as expected by the market, and Bitcoin has also begun to catch up recently. However, given the historical correlation between Bitcoin and the securities market, whether Bitcoin can truly become a hedge tool in the event of a capital war remains to be seen.