Trump’s “Autocratic Politics” Fueled Capital Shifts from Treasuries to Gold, Says Ray Dalio

TradingKey - As markets focus on U.S. President Donald Trump’s move to fire Federal Reserve Governor Lisa Cook and its cascading effects, gold prices have surged to a record high of $3,500 per ounce. Bridgewater Associates’ Ray Dalio said capital is shifting from U.S. Treasuries to gold — a trend rooted in Trump’s push toward authoritarian-style policies reminiscent of the 1930s.

Dalio warned that America under Trump is sliding into autocratic politics akin to the 1930s. Whether measured by gaps in wealth, gaps in values, or a collapse in trust, U.S. policy is moving in a more extreme direction.

After a quiet August, gold prices have recently broken out strongly, triggered directly by the legal battle between the Trump administration and Governor Cook. Concerns over Fed independence have boosted demand for gold, as investors fear a politicized central bank could destabilize global financial markets, while the prospect of more aggressive rate cuts adds further support to bullion.

While various factors have fueled gold’s rally, Trump’s policy actions remain the central driver. Dalio said:

“I think that what is happening now politically and socially is analogous to what happened around the world in the 1930-40 period.”

He pointed to actions like the U.S. government taking a 10% stake in Intel as examples of state intervention in the private sector — a move driven by a desire to control financial and economic conditions through strong, authoritarian leadership.

Trump’s recent nomination of close ally Stephen Miran to fill a Fed governor seat is a key step toward pushing significantly lower borrowing costs.

Dalio said that when central banks capitulate politically and are forced to keep rates low, it undermines confidence in the Fed’s ability to defend the currency’s value, reducing the appeal of dollar-denominated debt assets — ultimately weakening the long-standing global monetary order.

Dalio said that international investors had started shifting out of Treasuries into gold.

He added that years of massive U.S. budget deficits and unsustainable debt growth have pushed the American economy to the brink of a debt crisis. He warned that radical fiscal measures in the new budget could trigger a “heart attack” caused by debt within the next two to three years.

The Financial Times noted that Dalio’s remarks represent a rare public criticism of Trump by a prominent financial figure, although some Wall Street investors have grown increasingly wary of Trump’s policies in private.

Dalio said he is merely describing the cause-and-effect dynamics of what is unfolding — and that most people remain silent because they fear retaliation.