Ray Dalio Warns U.S. Debt Crisis Could Hit in 1 to 5 Years, Urges Gold and Bitcoin
Updated
Updated · CNBC · Aug 21
Ray Dalio Warns U.S. Debt Crisis Could Hit in 1 to 5 Years, Urges Gold and Bitcoin
3 articles · Updated · CNBC · Aug 21
Summary
Ray Dalio said the U.S. could face a debt crisis in as little as one year—more likely about three—arguing Treasury buybacks and rising long-term yields signal a financial inflection point.
Bessent's plan to buy back more than $4 billion of government debt, alongside Japan's reduced Treasury exposure, fits a pattern Dalio said points to mounting stress in the bond market.
40% more spending than revenue is driving the deficit, Dalio said, while debt service would equal roughly $11 trillion, or about 200% of annual revenue, if the U.S. were a business.
To avoid a traumatic adjustment, he called for a three-part fix: cut spending, raise tax revenue and lower interest rates, with the budget deficit reduced to 3% of GDP.
For investors, Dalio recommended staying underweight bonds and putting 10% to 15% of portfolios in gold, plus some bitcoin, as higher Treasury yields already pressure stocks.