Ray Dalio warns US is losing credibility as China gains power

Ray Dalio, the billionaire founder of Bridgewater Associates, is sounding the alarm again. Speaking at an OceanX event in Shanghai, he argued that the United States is losing credibility on the global stage while China continues to accumulate wealth and influence.

His core message was blunt: the relationship between Washington and Beijing is the “single most critical factor for global well-being.” And right now, that relationship is heading in a direction that should concern everyone holding any kind of asset, traditional or otherwise.

The changing world order, explained over coffee

Dalio has been building this thesis for years. His framework, which he calls the “changing world order,” argues that global leadership shifts in cycles. Great powers rise, peak, and decline based on a mix of economic strength, political cohesion, technological dominance, and the soundness of their financial systems.

In Dalio’s view, the US is somewhere on the back half of that curve. China, meanwhile, is narrowing the gap. He pointed to Beijing’s growing influence in manufacturing and AI-related supply chains as evidence that the power balance is tilting.

At the Shanghai event, Dalio called on elites from both countries to “rise above ourselves,” a diplomatic way of saying that the current trajectory of escalating tensions is, in his words, capable of producing “catastrophic damage.”

“There is nothing more important to the world’s health than the Chinese-American relationship.”

What this means for hard assets

Dalio has acknowledged in previous commentary that increasing tensions between major powers tend to push investors toward what he calls “hard assets.” Gold, commodities, and Bitcoin all fit that category. However, Dalio framed this as a reflection of geopolitical dynamics rather than a direct catalyst for crypto markets.

The credibility problem runs deeper than trade wars

The US credibility issue Dalio is flagging isn’t just about tariffs or tech bans. It’s about the foundational trust that underpins the dollar’s role as the world’s reserve currency.

Central banks around the world have been accumulating gold at a pace not seen in decades. China itself has been a major buyer. Some nations are experimenting with bilateral trade agreements that bypass the dollar entirely.