Dalio clarified in an interview on X, bluntly stating that US debt will explode like a "heart attack," shaking the dollar's status, and reminding investors to diversify risks with gold and Bitcoin. (Background: Dalio retires, the two pivotal moments of the hedge fund king: fist, and McNugget) (Background Supplement: Dalio "officially retires": liquidating final holdings, resigning from board positions) Bridgewater founder Ray Dalio posted today (3) on the X platform, pointing out that the Financial Times interview misquoted his views. He not only refuted the media but also focused on reiterating his concerns about US debt, the dollar's status, and the global monetary system, effectively issuing another warning to the market. Dalio likened the US debt problem to a "pending heart attack," emphasizing that if not addressed in time, a systemic crisis will be unavoidable. He indicated that government revenue is about 5 trillion USD, but annual expenditures reach as high as 7 trillion USD, plus the need to extend about 9 trillion USD in maturing debt, with interest alone approaching 1 trillion USD, indicating that the current financing structure has become unbalanced. When will the 'heart attack' of US debt occur? In Dalio's "Big Debt Cycle" framework, when debt growth outpaces nominal GDP growth, fiscal policy accumulates like plaque in blood vessels, ultimately blocking the flow of funds. He estimates that the next three to five years will be a critical window; once the market demands higher interest rates to compensate for risks, interest expenses will squeeze the government's regular budget, forcing cuts to social programs or accelerating debt issuance, triggering a vicious cycle. The Federal Reserve is at a loss in this situation. If it raises interest rates to curb inflation, the burden of old debt increases; if it lowers real interest rates or expands its balance sheet to buy debt, the dollar's purchasing power is diluted, equally eroding investor confidence. Dalio thus described this as a textbook "unsolvable equation," waiting for the variables to explode. Dollar hegemony and the independence of the Federal Reserve Besides the on-paper predicament, Dalio focused on the institutional problems in the US. He believes that the independence of the Federal Reserve is the last line of defense for the dollar's credibility; if politicians interfere with interest rate decisions for short-term votes (referring to Trump), the credibility of the Federal Reserve will be damaged, which will directly reflect in rising US debt yields and foreign capital reductions. When investors suspect that the US will print money to repay its debts, they will look for other value-preserving assets. In recent years, public criticism of monetary policy from the White House and Congress, as well as former President Trump’s threats to replace the Federal Reserve Chairman, have been seen by Dalio as typical signs of the "later stage of a big cycle." He warns that historically, monetary hegemony often collapses when internal governance becomes unbalanced, rather than being replaced unilaterally by external competitors. Populism and "American-style state capitalism" Dalio juxtaposes today's America with the transitional years from 1928 to 1938. The widening wealth gap and the rise of populism on both the left and right make it difficult for democratic processes to form lasting consensus, resulting in deeper government intervention in businesses and markets. The government’s strategy of holding shares in strategic industries and restricting investments and exports in the name of national security is rewriting the narrative of the "free market." In his view, the biggest risk of this "state capitalism" is not declining efficiency, but distorting market pricing signals. When political intentions drown out financial discipline, capital naturally flows out, and the demand for gold and crypto assets heats up. Gold and Bitcoin: Hedging combinations in chaotic times Dalio has long advocated for asset allocation diversification. He previously suggested allocating about 15% of investment portfolios to gold and Bitcoin to hedge against fiat currency depreciation. Gold is a debt-free asset, and its millennium of trust cannot be quickly eroded. Bitcoin, with its fixed supply mechanism, benchmarks against the unlimited printing of dollars, becoming "digital gold." This is not a panacea, but it can provide significant buffers when the monetary system is under pressure. He also reminds of hidden risks, including regulatory uncertainties around cryptocurrencies, technological defects, and privacy disputes. However, he believes that if stablecoins are properly regulated, they will not pose a systemic risk to the dollar system. He does not advocate for heavy positions in hedging gold and crypto assets but emphasizes proportional control and long-term holding. Note that this article is not investment advice from Dalio; please make your own judgments. Related Reports Returning to "payments": stablecoins are becoming a new type of dollar for global micro-traders' cross-border receipts. Earned 300 million USD in 7 days: Mysterious trader TechnoRevenant, is he the new king of on-chain or the market’s slayer? USDe stablecoin welcomes "dividend moment": Fee Switch activation is just one step away, market capitalization surpassing 12.5 billion USD. "Dalio: Cryptocurrencies can become the dollar's 'alternative currency', US debt heart attack is about to explode" This article was first published by BlockTempo, the most influential blockchain news media.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
Bridgewater's Ray Dalio: Crypto Assets Could Become a "Substitute Currency" for the US Dollar, US Debt Heart Attack is About to Explode
Dalio clarified in an interview on X, bluntly stating that US debt will explode like a "heart attack," shaking the dollar's status, and reminding investors to diversify risks with gold and Bitcoin. (Background: Dalio retires, the two pivotal moments of the hedge fund king: fist, and McNugget) (Background Supplement: Dalio "officially retires": liquidating final holdings, resigning from board positions) Bridgewater founder Ray Dalio posted today (3) on the X platform, pointing out that the Financial Times interview misquoted his views. He not only refuted the media but also focused on reiterating his concerns about US debt, the dollar's status, and the global monetary system, effectively issuing another warning to the market. Dalio likened the US debt problem to a "pending heart attack," emphasizing that if not addressed in time, a systemic crisis will be unavoidable. He indicated that government revenue is about 5 trillion USD, but annual expenditures reach as high as 7 trillion USD, plus the need to extend about 9 trillion USD in maturing debt, with interest alone approaching 1 trillion USD, indicating that the current financing structure has become unbalanced. When will the 'heart attack' of US debt occur? In Dalio's "Big Debt Cycle" framework, when debt growth outpaces nominal GDP growth, fiscal policy accumulates like plaque in blood vessels, ultimately blocking the flow of funds. He estimates that the next three to five years will be a critical window; once the market demands higher interest rates to compensate for risks, interest expenses will squeeze the government's regular budget, forcing cuts to social programs or accelerating debt issuance, triggering a vicious cycle. The Federal Reserve is at a loss in this situation. If it raises interest rates to curb inflation, the burden of old debt increases; if it lowers real interest rates or expands its balance sheet to buy debt, the dollar's purchasing power is diluted, equally eroding investor confidence. Dalio thus described this as a textbook "unsolvable equation," waiting for the variables to explode. Dollar hegemony and the independence of the Federal Reserve Besides the on-paper predicament, Dalio focused on the institutional problems in the US. He believes that the independence of the Federal Reserve is the last line of defense for the dollar's credibility; if politicians interfere with interest rate decisions for short-term votes (referring to Trump), the credibility of the Federal Reserve will be damaged, which will directly reflect in rising US debt yields and foreign capital reductions. When investors suspect that the US will print money to repay its debts, they will look for other value-preserving assets. In recent years, public criticism of monetary policy from the White House and Congress, as well as former President Trump’s threats to replace the Federal Reserve Chairman, have been seen by Dalio as typical signs of the "later stage of a big cycle." He warns that historically, monetary hegemony often collapses when internal governance becomes unbalanced, rather than being replaced unilaterally by external competitors. Populism and "American-style state capitalism" Dalio juxtaposes today's America with the transitional years from 1928 to 1938. The widening wealth gap and the rise of populism on both the left and right make it difficult for democratic processes to form lasting consensus, resulting in deeper government intervention in businesses and markets. The government’s strategy of holding shares in strategic industries and restricting investments and exports in the name of national security is rewriting the narrative of the "free market." In his view, the biggest risk of this "state capitalism" is not declining efficiency, but distorting market pricing signals. When political intentions drown out financial discipline, capital naturally flows out, and the demand for gold and crypto assets heats up. Gold and Bitcoin: Hedging combinations in chaotic times Dalio has long advocated for asset allocation diversification. He previously suggested allocating about 15% of investment portfolios to gold and Bitcoin to hedge against fiat currency depreciation. Gold is a debt-free asset, and its millennium of trust cannot be quickly eroded. Bitcoin, with its fixed supply mechanism, benchmarks against the unlimited printing of dollars, becoming "digital gold." This is not a panacea, but it can provide significant buffers when the monetary system is under pressure. He also reminds of hidden risks, including regulatory uncertainties around cryptocurrencies, technological defects, and privacy disputes. However, he believes that if stablecoins are properly regulated, they will not pose a systemic risk to the dollar system. He does not advocate for heavy positions in hedging gold and crypto assets but emphasizes proportional control and long-term holding. Note that this article is not investment advice from Dalio; please make your own judgments. Related Reports Returning to "payments": stablecoins are becoming a new type of dollar for global micro-traders' cross-border receipts. Earned 300 million USD in 7 days: Mysterious trader TechnoRevenant, is he the new king of on-chain or the market’s slayer? USDe stablecoin welcomes "dividend moment": Fee Switch activation is just one step away, market capitalization surpassing 12.5 billion USD. "Dalio: Cryptocurrencies can become the dollar's 'alternative currency', US debt heart attack is about to explode" This article was first published by BlockTempo, the most influential blockchain news media.