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The early 1970s were a turbulent time in America \u2014 marked by soaring inflation, an oil crisis and a sharp drop in stock prices that left investors scrambling for safe havens.<\/p>\n
And, according to billionaire investor Ray Dalio, history may be repeating itself. Surging prices and massive government spending could prompt investors to once again question the value of fiat currencies and the paper assets tied to them (1).<\/p>\n<\/p>\n
\u201cIt\u2019s very much like the early \u201970s \u2026 where do you put your money in?\u201d Dalio said at the Greenwich Economic Forum (2). \u201cWhen you are holding money, and you put it in a debt instrument, and when there\u2019s such a supply of debt and debt instruments, it\u2019s not an effective storehold of wealth.\u201d<\/p>\n
Dalio has long warned about the sheer size of America\u2019s national debt, now hovering around $37.86 trillion and climbing. He has described the situation as a potential \u201cdebt death spiral\u201d \u2014 where the government must borrow just to pay the interest on existing debt. Over time, this process accelerates.<\/p>\n
If that number feels abstract, Dalio has a more personal warning.<\/p>\n
The asset he\u2019s talking about is something nearly everyone holds in one way or another, whether in bank accounts or under mattresses: the U.S. dollar.<\/p>\n
In a recent post on X, Dalio shared a Q&A with the Financial Times (3). When asked what would happen to bonds and the dollar if a politically weakened Federal Reserve lets inflation run hot, his answer was blunt:<\/p>\n
\u201cIt would lead bonds and the dollar to go down in value and if not rectified, would lead to them being an ineffective storehold of wealth and the breaking down of the monetary order as we know it.\u201d<\/p>\n
That comment couldn\u2019t have come at a more sensitive time for the Federal Reserve. President Donald Trump has repeatedly attacked Chair Jerome Powell and is searching for a replacement.<\/p>\n
Treasury Secretary Scott Bessent told CNBC in late November, “I think there’s a very good chance that the president will make an announcement before Christmas \u2026 I think it’s time for the Fed just to move back into the background, like, it used to do, calm things down and work for the American people (4).”<\/p>\n
The President has also come under fire for attempting to oust Fed governor Lisa Cook, the first time a president has sought to remove a governor in the central bank\u2019s 112-year history. Cook sued to keep her job, and it was ruled she could continue in her post (5).<\/p>\n
In the midst of this turbulence, Dalio warned that if investors begin to believe the Fed will artificially hold rates too low, it could trigger \u201can unhealthy decline in the value of money.\u201d<\/p>\n
To be sure, that decline may already be underway. The U.S. Dollar Index, which tracks the dollar against a basket of major foreign currencies, tumbled 10.8% in the first half of 2025 \u2014 its worst performance since 1973, when Richard Nixon was president. (6)<\/p>\n
Meanwhile, inflation continues to chip away at Americans\u2019 purchasing power. According to the Federal Reserve Bank of Minneapolis, $100 in 2025 buys what just $12.05 could in 1970 \u2014 a sobering reminder that the dollar hasn\u2019t been a very effective \u201cstorehold of wealth\u201d for decades (7).<\/p>\n
Experts are also warning of \u2018stagflation,\u2019 a term used to describe an era when GDP growth is moderate, inflation is high, and employment rates are taking a hit (8).<\/p>\n
As Dailo notes, the late 70s and early 80s stand as a classic example of this stagnant economic trend. Today, economic measures are worrying: Inflation is still rising and outpacing the Fed\u2019s predictions. The unemployment rate is rising, particularly for new grads. Perhaps most worrying of all, the national debt has just hit $38.4 trillion, and investors warn that the country may be headed into a spiral where the government borrows even more just to meet the interest on current payments.<\/p>\n
The good news? Dalio revealed one asset he believes can help safeguard your wealth from what\u2019s coming.<\/p>\n
Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)<\/a><\/p>\n Dalio\u2019s answer is simple: gold.<\/p>\n \u201cGold is a very excellent diversifier in the portfolio,\u201d he said (9).<\/p>\n \u201cIf you look at it just from a strategic asset allocation perspective, you would probably have something like 15% of your portfolio in gold \u2026 because it is the one asset that does very well when the typical parts of the portfolio go down.\u201d<\/p>\n Gold\u2019s appeal is straightforward. Unlike fiat currencies, it can\u2019t be printed at will by central banks. It\u2019s also long been viewed as the ultimate safe haven \u2014 and has proven its mettle this year by hitting record high prices. Gold performance is not tied to any one country, currency or economy. When markets wobble, or geopolitical tensions flare, investors tend to flock to gold, driving prices higher.<\/p>\n Dalio isn\u2019t alone in that view. Jeffrey Gundlach, founder of DoubleLine Capital and widely known as the \u201cBond King,\u201d recently said that a 25% portfolio allocation to gold \u201cis not excessive,\u201d calling the metal \u201can insurance policy\u201d that\u2019s likely to remain \u201cin a winning mode\u201d amid ongoing dollar weakness.<\/p>\n Over the past twelve months, gold prices have skyrocketed, and some investors predict even higher prices in 2026.<\/p>\n If you want to get in on the action, one way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Goldco<\/a>.<\/p>\n Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.<\/p>\n With a minimum purchase of $10,000, Goldco offers a 1-day IRA set-up, price match guarantee, highest buy-back guarantee, award-winning customer service and access to a library of retirement resources.<\/p>\n Plus, the company will match up to 10% of qualified purchases in free silver<\/a>. Just keep in mind that gold is often best used as one part of a well-diversified portfolio.<\/p>\n Gold isn\u2019t the only asset investors turn to during inflationary times. Real estate has also proven to be a powerful hedge.<\/p>\n When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that adjusts for inflation.<\/p>\n Over the past five years, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index has jumped by 49%, reflecting strong demand and limited housing supply (10).<\/p>\n Of course, high home prices can make buying a home more challenging, especially with mortgage rates still elevated. And being a landlord isn\u2019t exactly hands-off work \u2014 managing tenants, maintenance and repairs can quickly eat into your time (and returns).<\/p>\n The good news? You don\u2019t need to buy a property outright \u2014 or deal with leaky faucets \u2014 to invest in real estate today. Crowdfunding platforms like Arrived<\/a> offer an easier way to get exposure to this income-generating asset class.<\/p>\n Backed by world-class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with just $100<\/a>, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.<\/p>\n The process is simple: browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you\u2019d like to purchase and then sit back as you start receiving any positive rental income distributions<\/a> from your investment.<\/p>\n Another option is Homeshares<\/a>, which gives accredited investors access to the $35 trillion U.S. home equity market \u2014 a space that\u2019s historically been the exclusive playground of institutional investors.<\/p>\n Homeshares allows accredited investors to gain direct exposure to a portfolio of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund \u2014 without the hassles of buying, owning or managing property.<\/p>\n The fund focuses on homes with substantial equity, using Home Equity Agreements (HEAs)<\/a> to let homeowners access liquidity without taking on debt or interest payments. This creates an attractive, low-maintenance investment vehicle for retirement savers, with a minimum investment of $25,000.<\/p>\n With risk-adjusted target returns of 14% to 17%, the U.S. Home Equity Fund offers investors access to America\u2019s largest store of household wealth.<\/p>\n And for a limited time, Homeshares will provide Moneywise readers an exclusive 5% bonus for IRA investments<\/a>.<\/p>\n It\u2019s easy to see why great works of art tend to appreciate over time. Supply is limited, and many famous pieces have already been snatched up by museums and collectors. That scarcity also makes art an attractive option for investors looking to diversify and preserve wealth during periods of high inflation.<\/p>\n For example, in 2022 \u2014 shortly after U.S. inflation hit a 40-year high \u2014 a collection of art owned by the late Microsoft co-founder Paul Allen sold for $1.5 billion at Christie\u2019s New York, making it the most valuable collection in auction history (11).<\/p>\n Historically, this alternative asset has been restricted to high rollers like Allen, but that\u2019s quick. changing.<\/p>\n With Masterworks \u2014 a platform for investing in shares of blue-chip artwork<\/a> by renowned artists, including Pablo Picasso, Jean-Michel Basquiat and Banksy \u2014 you can get a start with art. It\u2019s easy to use, and Masterworks has had 25 successful exits to date.<\/p>\n After signing up, all you have to do is browse their impressive portfolio of paintings<\/a> and choose how many shares you\u2019d like to buy. Masterworks will handle all the details, from purchase and procurement all the way to storage and sale.<\/p>\n Masterworks has distributed roughly $61 million back to investors, including the principal. New offerings have sold out in minutes, but you can skip their waitlist here<\/a>.<\/p>\n Note that investing involves risk. See Reg A disclosures here: masterworks.com\/cd<\/a>.<\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.<\/p>\n CNBC (1<\/a>), (4<\/a>); @Bloomberg Podcasts (2<\/a>) @RayDalio (3<\/a>); Fortune (5<\/a>); Bloomberg Originals (6<\/a>); Federal Reserve Bank of Minneapolis (7<\/a>); Forbes (8<\/a>); Bloomberg Television (9<\/a>); S&P Global (10<\/a>); Christie\u2019s (11<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Amal Alhasan \/ Getty Images Moneywise and Yahoo Finance LLC may earn commission or revenue through links in…\n","protected":false},"author":2,"featured_media":333211,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,12864,186231,186229,164,176,186230,6387,20309,7929,11917,29146,186232],"class_list":{"0":"post-333210","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-dave-ramsey","12":"tag-debt-instrument","13":"tag-debt-instruments","14":"tag-economy","15":"tag-federal-reserve","16":"tag-fiat-currencies","17":"tag-gold-prices","18":"tag-government-spending","19":"tag-investors","20":"tag-jeff-bezos","21":"tag-ray-dalio","22":"tag-safe-havens"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/333210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=333210"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/333210\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/333211"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=333210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=333210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=333210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}