China’s Real Estate Bubble And 5 Other Predictions that Turned Out to be Wrong

3. Ray Dalio: US Dollar Collapse

Prediction: 2020

In 2020, Veteran Hedge Fund Manager Ray Dalio warned that the US Dollars’ status as a global reserve currency was in danger. The prediction came amid the easy monetary policy taken by the US Federal Reserve to try and caution the economy amid the effects of the coronavirus.

The excessive money creation through stimulus packages and cutting interest rates to record lows prompted the hedge fund to predict the demise of the US dollar. Dalio also warned that growing economic and geopolitical rivalry with China posed a significant danger to the greenback. He also suggested that the US economy would face a depression-like scenario due to the pandemic, and businesses and consumers would feel the long-term impact.

The billionaire investor advised investors to diversify their portfolios with alternative assets like gold and cryptocurrencies that would benefit from the dollar’s collapse.

While the dollar has faced a string of headwinds, it remains the global reserve currency and has yet to experience a substantial decline in status value, as predicted by Dalio. The dollar index, which measures the greenback’s strength against the other major currencies, has fluctuated between $90 and 104 since 2020, affirming its status as the dominant currency for international trade finance and reserve. It also accounts for more than 60% of the global foreign exchange reserves.