Ray Dalio: The United States will face a debt crisis within three years, and BTC and gold can serve as safe havens for coins

Bridgewater Associates founder Dalio (Ray Dalio) warns the Trump administration to immediately commit to reducing the deficit, otherwise a major debt crisis may occur within three years. He also believes that all currencies will depreciate, and BTC and gold can serve as safe havens for currencies.

Ray Dalio: There will be a major debt crisis in the United States within three years

Dalio said in an interview with the Odd Lots podcast that if the US government does not reduce its deficit, a major debt crisis will occur:

I cannot tell you exactly when it will come, it's like a heart attack. My guess is three years plus or minus one year, around this number.

Trump's team is working hard to achieve dual goals: maintaining large-scale tax cuts and reducing the annual deficit, which has recently reached $1.8 trillion. At the same time, Dalio is promoting his latest work, 'How Countries Go Broke,' in which he explains how the debt cycle works and advocates for immediately reducing the U.S. deficit to 3% of GDP.

The United States may face debt restructuring if it does not reduce its deficit again.

Although the United States has been repaying existing debts by issuing new bonds, it may face the possibility of a lack of buyers. Dalio said, 'When you add more debt to this pile of debt, the problem is not just the existing debt, you also have to increase the sales of more debt.'

He thinks markets could suffer a similar shock — the U.S. may at some point sanction large holders of U.S. Treasuries, stop paying interest, or even seek to restructure their debt.

All currencies will depreciate

When asked whether the United States can devalue the dollar while maintaining its 'special status' in the global financial system, Dalio believes that the dollar is not devalued relative to all other currencies, and that all other currencies will devalue along with the dollar. In other words, this depends on each central bank, and it is also closely related to other currencies. This is an ugly game.

This is a lot like the 70s of the 20th century, and also like the 30s of the 20th century, when the exchange rate of all currencies against gold or other hard assets fell.

BTC and gold can serve as safe havens for currencies

When it comes to the risk of an "ugly" race to devaluation, Dalio said investors must ask:

What are the alternative money supply stability? BTC may be a big part of this, but what is an alternative currency? Because debt is money, and money is debt.

Dalio likes BTC as a safe haven because, unlike real estate, it is not restricted and cannot be easily seized or taxed.

He also recommends investors to hold gold cautiously, keeping it around 10% to 15% of the theoretical investment portfolio. This small amount of gold can serve as a protection and diversify the investment portfolio.

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