Dalio Warns US Debt Crisis Looms as He Recommends Diversification into Gold and Bitcoin

Bridgewater Associates founder Ray Dalio has warned of an impending US debt crisis, estimating it could materialize in about three years. He urges investors to reduce exposure to fixed-income securities and diversify into real assets like gold and Bitcoin.

The current budget deficit stands at $2 trillion, with debt-servicing costs alone expected to reach $1 trillion. Dalio projects that the government must narrow the deficit from 6% of GDP to 3% through spending reductions, revenue growth, and lower borrowing costs.

Dalio recommends allocating 10% to 15% of an investment portfolio to gold and holding a small fraction in Bitcoin to mitigate systemic risks while bolstering returns. He noted that major global economies face similar pressures, including the U.K., China, and Japan.