Dalio Sounds Alarm: Japan-Style Debt Crisis Coming to America, Gold & Bitcoin Best Bet
Ray Dalio, founder of Bridgewater Associates, has expressed concerns that Japan's debt crisis will repeat itself in America. According to Dalio, Japanese bondholders lost a significant portion of their investments when the Bank of Japan printed money and bought up government bonds due to lack of private demand.
Dalio warns that the US is following a similar path, with the government collecting $5.5 trillion this year but owing roughly $11 trillion in debt payments, double its income. He notes that independent numbers from the Congressional Budget Office support this strain, predicting that debt held by the public will reach 120% of GDP by 2036.
Dalio recommends investors shift their portfolios away from government bonds and into gold and Bitcoin, citing historical data showing Japanese bondholders lost 51% against dollar debt and 76% against gold after 2013. He advocates for a portfolio allocation of 10-15% in gold and a small position in Bitcoin.