Dalio Warns of Global Debt Crisis: 'Turn to Gold and Bitcoin' to Reduce Risk

Ray Dalio, billionaire founder of Bridgewater Associates, has sounded an alarm about the growing risk of global debt. He warns that if left unchecked, it could lead to a point of no return for investors.

The rapid increase in government borrowing is putting pressure on interest rates and currencies, according to Dalio. Recent movements in the US Treasury bond market indicate that the 'Big Debt Cycle' has reached its advanced stages. As governments issue more bonds, investor demand isn't keeping pace, leading to a suppression of economic growth.

Dalio predicts that if current trends continue, the US federal debt could rise to $55-60 trillion within the next decade, from approximately $32 trillion today. Annual interest payments would then reach around $1 trillion.

To mitigate this risk, Dalio advises investors to diversify their portfolios by reducing weight on bonds and increasing exposure to gold and Bitcoin. He suggests allocating 10-15% of a portfolio to Bitcoin, but only a small portion should be invested in it due to its volatility.