Dalio Warns of Potential U.S. Debt Crisis
Ray Dalio, founder of Bridgewater Associates, has warned of a potential debt crisis, stating that the U.S. federal government's repayment burden for this year is approximately $11 trillion. He estimates the government's revenue at about $5.5 trillion and expenditures at around $7.5 trillion, resulting in a deficit of about $2 trillion. Dalio pointed out that this fiscal deficit increases the issuance of government bonds and interest burdens, leading to more borrowing. The interest costs that the U.S. government must bear this year are about $1 trillion, with maturing principal amounting to around $10 trillion, bringing the total repayment amount to approximately $11 trillion. He mentioned that the risk of a debt crisis would decrease if the fiscal deficit-to-GDP ratio were to drop from about 7% to 3%. Conversely, he warned that without policy changes and in the event of external shocks, the crisis could accelerate. Dalio argued that Bitcoin and gold could perform relatively well, suggesting a reduction in bond allocation and an increase in the proportions of gold and Bitcoin in asset allocation.
-- Price
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