Billionaire investor and hedge fund manager Ray Dalio has again sounded the alarm on the U.S. federal debt. He warned that the country could face an "economic heart attack." One of the most s
Billionaire investor and hedge fund manager Ray Dalio has again sounded the alarm on the U.S. federal debt. He warned that the country could face an "economic heart attack."
One of the most successful investors ever, he is the founder of one of the world's largest hedge funds, Bridgewater Associates. He is also the author of bestselling books, "Principles: Life & Work" (2017), "Why Nations Succeed and Fail" (2021), and "How Countries Go Broke" (2025).
The economic health of the United States and the world is a concern he keeps talking about and warns that the ballooning debt needs to be urgently addressed to avoid a major crisis in the future.
Inside U.S. Treasury Secretary Bessant's plan to tackle soaring debt (1:48)On Nov. 9, Dalio appeared on the "Money Rehab" podcast in which he reiterated his concern around the U.S. federal debt which currently stands at $40.6 trillion. A lot of the government's money is spent on paying off the debt interest itself. If this debt piles up, it squeezes other spending like defense.
If someone doesn't earn enough to pay off their debt, they are going to have a debt problem. What holds true for individuals holds true for countries also, he stressed.
But unlike individuals, countries have the power of printing more money to pay off the debt but it leads to currency devaluation and its buying power declines, the billionaire warned.
A government can certainly print money, but it can't increase wealth by printing money, he underlined.
Dalio compared the soaring debt to a body developing a "plaque" like a "disease."
If the U.S. doesn't cut the budget deficit down from around 6.5% of GDP to 3%, there is a likelihood of "an economic heart attack," he warned.
To deal with a potential economic crisis, Dalio recommended building a diversified portfolio in which gold should have a 10%-15% allocation.
When the host Nicole Lapin asked him about crypto allocation, the veteran hedge fund manager said there are pros and cons to crypto.
While central banks hold gold, they are unlikely to hold crypto due to a lack of privacy around digital assets, he underlined. So, he said he finds crypto less appealing than gold. But he admitted to owning a small amount of crypto.
Whether it's gold or crypto, Dalio said it's important to invest in non-traditional types of investment for diversification purpose.
"If the credit system and the debt problems become real, and there's a significant chance that they can become real problems, I think that it's very important to have that as a diversifier."
When Lapin pressed him on Bitcoin allocation, he admitted to owning it but refused to go into particulars. Nonetheless, he has disclosed on previous occasions that Bitcoin makes up only 1% of his investment portfolio.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are highly volatile and risky. Always conduct your own research before making any investment decisions.
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