Ray Dalio has warned that the United States is heading towards a "dictatorship reminiscent of the 1930s." He believes this political change could lead to an increase in long term U.S. bond yields, a weaker dollar, and rising gold prices.
Indeed, the long term bond yields in the U.S. surged today. Investors are currently watching to see if this change could trigger a price increase for Bitcoin.
Trump's Management of the Fed is a 'Serious Risk'
Dalio made this statement in an interview with the Financial Times. He defines "1930s-style authoritarianism" as the increasing intervention of the Trump administration in the market economy. The U.S. government has recently stirred controversy with its decision to purchase a 10% stake in Intel, a company facing financial difficulties.
In the interview, Dalio also focused on the increasing wealth gap in the U.S., arguing that this widening gap is causing a weakening of social trust and significant value differences among ordinary Americans. He warned that this erosion of trust is leading to more extreme policies.
Recent efforts by President Trump to control the Federal Reserve, including the firing of board member Lisa Cook, are a prime example. Dalio stated that if the central bank succumbs to political pressure and keeps interest rates low, this will "undermine confidence in the Fed's ability to protect the value of the currency and diminish the appeal of holding dollar-denominated debt."
Dalio is not the first person to raise these concerns. On Monday, ECB President Christine Lagarde expressed worries about the US economy. She warned that if Trump influences the Fed's interest rate decisions, it would pose "very serious risks" to both the US economy and the global economy.
Gold Soars as Long Term Yields Surge
Dalio predicts that if the unilateral actions of the Trump administration continue, the long-term yield on U.S. bonds will surge, the dollar will weaken, and gold prices will rise. He notes that international investors have shifted from holding Treasury bonds to gold.
On September 2, the yield on 30-year U.S. Treasury bonds soared to 4.982%. The futures price of gold closed the trading session at a record high of 3,604 USD/ounce. While short-term bond yields fell due to increasing expectations of interest rate cuts, long term bond yields continued to rise.
Market participants are closely watching to see if these changes will drive the price of Bitcoin up. The price of Bitcoin rose alongside gold at the end of April as long-term bond yields surged amid the U.S. trade war.
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Billionaire Warning: Trump's Intervention in the Fed Will Cause the Collapse of the USD
Ray Dalio has warned that the United States is heading towards a "dictatorship reminiscent of the 1930s." He believes this political change could lead to an increase in long term U.S. bond yields, a weaker dollar, and rising gold prices. Indeed, the long term bond yields in the U.S. surged today. Investors are currently watching to see if this change could trigger a price increase for Bitcoin. Trump's Management of the Fed is a 'Serious Risk' Dalio made this statement in an interview with the Financial Times. He defines "1930s-style authoritarianism" as the increasing intervention of the Trump administration in the market economy. The U.S. government has recently stirred controversy with its decision to purchase a 10% stake in Intel, a company facing financial difficulties. In the interview, Dalio also focused on the increasing wealth gap in the U.S., arguing that this widening gap is causing a weakening of social trust and significant value differences among ordinary Americans. He warned that this erosion of trust is leading to more extreme policies. Recent efforts by President Trump to control the Federal Reserve, including the firing of board member Lisa Cook, are a prime example. Dalio stated that if the central bank succumbs to political pressure and keeps interest rates low, this will "undermine confidence in the Fed's ability to protect the value of the currency and diminish the appeal of holding dollar-denominated debt." Dalio is not the first person to raise these concerns. On Monday, ECB President Christine Lagarde expressed worries about the US economy. She warned that if Trump influences the Fed's interest rate decisions, it would pose "very serious risks" to both the US economy and the global economy. Gold Soars as Long Term Yields Surge Dalio predicts that if the unilateral actions of the Trump administration continue, the long-term yield on U.S. bonds will surge, the dollar will weaken, and gold prices will rise. He notes that international investors have shifted from holding Treasury bonds to gold. On September 2, the yield on 30-year U.S. Treasury bonds soared to 4.982%. The futures price of gold closed the trading session at a record high of 3,604 USD/ounce. While short-term bond yields fell due to increasing expectations of interest rate cuts, long term bond yields continued to rise. Market participants are closely watching to see if these changes will drive the price of Bitcoin up. The price of Bitcoin rose alongside gold at the end of April as long-term bond yields surged amid the U.S. trade war.