According to hedge fund magnate Ray Dalio, the economic fight amid China and the U.S. has miffed financial markets in the past 2 Years can next blossom in a full-blown battle for spending capital and eventually, for the status of the world’s reserve currency. The power struggle amid the world’s two biggest powerhouses—by means of a tit-for-tat trade spat at present—might soon bud into a conflict over the dollar’s long-established place as the world’s favored type of exchange, the Bridgewater Associates founder reported during the annual social event of the NCUSCR (National Committee on U.S.-China Relations) in New York.
Dalio stated, “There is a trade battle, technology war, geopolitical war, and there can be capital wars. And how that has loomed is going to decide what our futures will be.” The founder of the world’s biggest hedge fund stated that nations or empires that once had reserve currency status were inclined to prioritize civility and education, new technologies and infrastructure, which facilitated universal influence over time. He added, “I sincerely don’t know how it would be received. We want to be hopeful.” Dalio’s cautions came as federal policymakers warned that some US retirement money is spending into China to halt the tide of funds to Beijing.
On a similar note recently, it was stated that China is building up its “shadow reserves” to reduce its dependency on the U.S. dollar. Reportedly, China is greatly exposed to the U.S. dollar, but at present, with the menace of “decoupling,” Beijing is mutely expanding its reserves to decrease its reliance on the world’s biggest reserve currency, analysts stated. The ongoing trade strains with the U.S. has “surged the perils of a monetary decoupling” amid the two leading economies, ANZ Research stated in a new report.
Stephen Yanez studied masters of business administration in finance from an elite university. He is a chief editor at our portal and is very proficient in his job duties, business finances, clients’ relations, and other related operations. He has in-depth knowledge of business enterprise, financial strategies, economic forecasting, and leadership. Stephen is fully devoted to managing the business column and writes about mergers, acquisitions, IPOs (initial public offerings), and quarterly revenue forecasts. He is a passionate reader and in leisure time can be seen in a bookstore or park reading.