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Ray Dalio Warns of Potential U.S. Debt Crisis Within Three Years
Finance · Investment Managers · yonhap_finance · 2026-08-24
Bridgewater founder Ray Dalio warns that rising U.S. debt and fiscal deficits could trigger a crisis within three years, advocating for portfolio diversification.
What Happened
Debt Crisis Warning: Ray Dalio, founder of Bridgewater Associates, has warned that the U.S. federal government could face a debt crisis within the next three years. He highlighted that the combination of rising interest costs and maturing principal payments now exceeds the government's total revenue.
Economic Dynamics: Dalio explained that the cycle of rising debt service costs leads to a lack of investor demand, forcing the government to rely on central bank money printing. This process inevitably leads to currency devaluation and heightened inflation, creating a precarious economic environment.
Investment Strategy: To mitigate these risks, Dalio recommends reducing exposure to debt-based assets while increasing holdings in non-government issued currencies like gold and Bitcoin. He suggests that allocating 10-15% of a portfolio to gold can effectively lower overall risk while enhancing potential returns.
Global Perspective: He noted that many other major economies, including the UK, China, and Japan, are grappling with similar fiscal challenges. Consequently, he advises investors to diversify across countries and asset classes that demonstrate sound balance sheets and lower geopolitical risks.