Dalio Sounds Alarm: US Debt Crisis Looms Within Five Years

Ray Dalio, founder of Bridgewater Associates, warns that a US debt crisis could emerge within five years. He estimates that federal spending is running about 40% above revenue, with annual principal and interest payments totaling roughly $11 trillion this year.

Dalio favors underweighting bonds, holding 10%-15% in gold, and keeping a smaller allocation to Bitcoin. He suggests that investors should be prepared for a potential crisis by diversifying their portfolios.

The warning comes after Treasury Secretary Scott Bessent said long-term bond buybacks could exceed $4 billion per operation, which Dalio sees as another sign of pressure in the US debt market.