legendary investor Ray Gallio The world is on the “edge” of a capital war, it warned on Tuesday, amid rising geopolitical tensions and turmoil in capital markets.

In an interview with CNBC Dan Murphy on stage world government summit Dalio said in Dubai, United Arab Emirates, that we are approaching the realm of capital wars – when currencies are weaponized using measures such as trade embargoes, blocking access to capital markets or using debt ownership as leverage.

“We’re on the edge,” Dario said. “That means no, but it means we are very close to (capital wars) and can easily fall to the brink of capital wars because there is mutual fear.”

He noted the recent escalation in tensions driven by the Trump administration bring greenland – Danish territory – under Washington’s control.

He warned that European holders of dollar-denominated assets were “concerned” that they might be subject to sanctions, and “the United States may also be concerned about not being able to get funding, or not being able to get purchases (from Europe),” he said.

According to statistics, European investors accounted for 80% of foreign purchases of U.S. Treasury bonds from April to November. Citi Research Cited by Reuters.

“Capital, money is important,” Dalio said on Tuesday. “We’re seeing capital controls… happening around the world today, and it’s questionable who’s going to experience that. So, we’re on the edge — that doesn’t mean we’re in (a capital war now), but it means it’s a logical concern.”

Since returning to the White House last year, U.S. President Donald Trump The United States has imposed and then lifted a series of punitive tariffs on trading partners and political rivals. These decisions triggered volatility in financial markets.

Dalio added that historically, capital wars have imposed measures such as foreign exchange and capital controls, and said institutions such as sovereign wealth funds and central banks are already developing “provisions” to prepare for such controls.

Dalio noted that historically, capital wars have revolved around “major conflicts.” He said the United States imposed sanctions on Japan before the United States entered World War II, escalating the two countries’ “contentious relationship.”

“One can imagine that in today’s world, there is a similar situation between China and the United States, and even leaders of different countries are speculating and talking about the dependence of the United States and Europe – because the opposite side of the trade deficit… is capital, there is a capital imbalance, and capital can be used for war.”

Gold remains the safe haven of choice

Amid these tensions, gold Still the best place to save money, Dalio says – after a period of historic sell-off This dragged precious metals lower across the board. By Tuesday, gold and silver There are tentative signs of recovery.

Asked whether recent price action would raise questions about gold being the safest place to store money, he said: “That’s not going to change day by day.”

“Gold is up about 65% from a year ago and is down about 16% from its highs. I think people are wrongly thinking, will gold rise or fall, should I buy it?” Dalio said.

“Instead, … maybe a central bank or a government or a sovereign wealth fund should say, what proportion of gold should I have in my portfolio (and) keep it a certain proportion because gold is a very effective diversifier against other, worse parts of the portfolio.”

“Because gold is a diversifier, it performs particularly well when the economy is bad and not so well when the economy is booming, (but) it is an effective diversifier,” Dalio added. “I would say the most important thing is to have a diversified portfolio.”