Ray Dalio, founder of Bridgewater Associates, has shared his insights on the current U.S. fiscal situation and potential global economic challenges, addressing the role of Bitcoin BTC/USD in the process.
What Happened: Dalio weighed in on the U.S. debt crisis and the best assets for preserving wealth in an interview on the All-In podcast.
Dalio highlighted the U.S. fiscal deficit at 7% of GDP—the highest among industrialized nations.
With rising debt levels and uncontrolled spending, investors are looking for alternatives to the dollar.
Between Bitcoin and gold, Dalio favors gold as the superior store of value, citing its long-standing resilience and lower regulatory risks.
He owns some Bitcoin but “not nearly as much as gold,” choosing to diversify his holdings strategically.
Dalio warns that the U.S. is facing a critical debt situation, with federal government debt at 125% of GDP and projected to rise significantly.
He emphasizes the need for immediate action, proposing a “3% solution” to cut the deficit to 3% of GDP from its current 7.5%.
“Do it soon, fast, when the time is good, when the economy is good,” Dalio urges. He stresses that delaying action will only make future cuts more severe due to compounding interest.
Also Read: Bitcoin, Solana, XRP With Strong Month But Challenges Await: Report
Why It Matters: Dalio stresses diversification and warns against overvaluing trendy sectors like AI. He added, "A great company that gets expensive is much worse than a bad company that’s really cheap."
He sees rising global fragmentation and conflict and warns of a possible U.S. civil war alongside international tensions.
Dalio predicts AI will upend employment, possibly triggering socialist policies and economic turbulence.
Dalio expresses concern about AI’s disruptive effects on employment and the potential rise of socialism.
He predicts “a period in that 10-year period where it’s going to be hellacious” as economic problems cause more confrontation globally.
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