Ray Dalio: The Cycle of Money Devaluation and the Potential Return to the Gold Standard

Jakarta, Pintu News – The dynamic global economic situation has prompted various predictions from leading financial analysts. One of them is Ray Dalio, founder of Bridgewater Associates, who warns of a possible return of the gold-based currency era in the future. This issue is increasingly relevant amid concerns about the government’s continued money printing policy and its potential impact on currency values and crypto markets.

Money Devaluation Cycle and Potential Return to Gold Standard

In his statement on platform X (formerly Twitter), Ray Dalio reviewed the historical cycle in which fiat currencies like the US dollar devalued after a long period of massive money printing by governments. He said that historically, this cycle often ends with the government re-linking the value of the currency to gold reserves. According to Dalio, this happens when people begin to lose faith in the fiat system and are reluctant to hold a currency that continues to lose value.

Dalio details four main stages in the cycle. First, the government prints a lot of money to meet the needs of the economy. Second, the government debt is paid with new money whose value has been devalued. Third, people are reluctant to hold on to fiat money as its value drops. Finally, the government re-links the currency to gold to restore confidence. Dalio cautions that while this scenario will not happen in the near future, the possibility remains.

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Impact of Money Printing Policy on Economy and Crypto

Ray Dalio also criticized the policy of printing money as a solution to overcome sovereign debt, especially in the United States. He highlighted the difference in views between former President Donald Trump, who tends to support dollar devaluation to reduce the country’s debt burden, and Federal Reserve Governor Jerome Powell, who seeks to keep inflation low and stable. According to Dalio, devaluation policies usually benefit debtors but hurt creditors because the real value of debt decreases as the value of the currency falls.

The aggressive money printing policy has also had a direct impact on the cryptocurrency market. Many investors turn to crypto assets such as Bitcoin (BTC), Ethereum (ETH), as well as physical assets such as gold as a form of protection against the risk of inflation and devaluation of fiat currencies. In this context, the development of crypto and gold prices is strongly influenced by the level of public confidence in the monetary policy taken by the government.

Asset Diversification Strategy Amid Uncertainty

Given the potential devaluation that may occur, Ray Dalio recommends that investors do not rely on just one type of asset. He suggests allocating around 15% of the portfolio to hedge assets such as gold or Bitcoin (BTC). Assuming an investment value of USD 1,000 or around IDR 16,375,000 (exchange rate 1 USD = IDR 16,375), then around IDR 2,456,250 should be allocated to both types of assets.

This diversification is considered important to maintain the value of wealth when there is market turmoil due to changes in government policy. In addition, Dalio also emphasized the importance of understanding the global financial cycle and making careful investment decisions. Investors are reminded to keep abreast of developments in the crypto and gold markets so that they can adjust their strategies accordingly.

Risk mitigation measures through portfolio diversification become increasingly crucial when volatility increases and confidence in fiat money decreases. In this situation, crypto and gold become alternatives that many global investors choose as an effort to maintain the purchasing power of their assets.

Conclusion

Ray Dalio’s prediction of the potential return of the gold-based currency era provides a new perspective in understanding the impact of government money printing policies. Although there is no certainty that this cycle will occur in the near future, anticipatory steps by diversifying into crypto and gold assets are a logical choice for investors who want to reduce risk amid economic uncertainty.

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Reference

• Daily Hodl. Billionaire Ray Dalio Says Government Money Printing Could Lead to New Gold-Backed Currency Era. Accessed August 6, 2025.