"Of course cash is still trash... Do you know how fast you're losing buying power in cash?"

"So when I say cash is trash, what I mean is all currencies in relationship to the euro, in relationship to the yen, all of those currencies like in the 1930's will be currencies that will go down in relationship to goods and services."

Unfortunately, he added, this doesn't mean that investors will be much better off keeping their money in stocks or bonds, because "equities are trashier".

Dalio warned that after more than a decade of unprecedented equity market gains, the problem has become the fact that too many investors are crowded into stocks, and while the last few weeks have been a relative bloodbath for some, Dalio says there is room for more pain to come...

"Here's the dynamic that I think is a problem: everybody is long equities, and everybody wants everything to go up.

"The more they hype it the more it becomes somebody else's financial asset they're holding.