Ray Dalio, founder of Bridgewater Associates, joined CNBC's "Squawk Box" at the World Economic Forum in Davos on Tuesday to discuss what he's watching in the markets for 2020. When asked what investors should buy to protect themselves from the inevitable stock market volatility coming down the pike, Mr. Dalio made the following comments:
"You can't jump into cash - cash is trash...because they're going to print money."
"I think you have to have a certain amount of gold in your portfolio or you have to have something that's 'hard.'"
"You have a fiat monetary system which means that you can print whatever amount of money you want - and that's what governments do."
"The depreciation of the exchange rate and the printing of money, I think, over the next few years, is going to be the biggest thing."
Dalio says government deficits will continue to expand around the world and negative interest rates will be the policy of choice for central bankers, including in the United States, even though it makes no logical sense to hold negative interest yielding bonds.
The billionaire investor was also asked to share his thoughts on whether or not Bitcoin is an acceptable substitute for gold. The short answer, according to Dalio, is "no."
"There are two purposes of money: a medium of exchange and a storehold of wealth. Bitcoin is not effective in either of those cases now...it's too volatile."
Watch the entire 16-minute interview: https://www.cnbc.com/video/2020/01/21...
Ray Dalio is an American businessman and founder of the investment firm Bridgewater Associates, one of the world's largest hedge funds. In 2012, Dalio appeared on the annual Time 100 list of the 100 most influential people in the world. In 2011 and 2012 he was listed by Bloomberg Markets as one of the 50 Most Influential people. Institutional Investor's Alpha ranked him No. 2 on their 2012 Rich List. Dalio has been labeled the Steve Jobs of investing.