Dalio, in an exclusive interview on X, bluntly stated 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 from Bridgewater: two major turning points in the king of hedge funds: a fist and McNuggets) (Additional context: Dalio's "official retirement": liquidating the last holdings and resigning from board positions) Ray Dalio, founder of Bridgewater, posted on the X platform today (3), pointing out that the Financial Times misquoted his views in an interview report. He not only rebutted the media but also focused on reiterating his concerns about US debt, the dollar's status, and the global monetary system, essentially sending another warning to the market. Dalio likened the US debt issue to "an impending heart attack," emphasizing that if not addressed promptly, a systemic crisis would be unavoidable. He pointed out that government revenue is about 5 trillion USD, but annual spending reaches as high as 7 trillion USD, plus the need to roll over about 9 trillion USD in maturing debt, with interest alone nearing 1 trillion USD, indicating a significant imbalance in the current financing structure. When will the US debt "heart attack" occur? In Dalio's framework of the "big debt cycle," when debt growth outpaces nominal GDP growth, fiscal policy accumulates like plaque in blood vessels, ultimately obstructing the flow of funds. He estimates that the next three to five years will be a crucial 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, initiating a vicious cycle. The Federal Reserve is at a loss in this situation. If it raises rates to curb inflation, the burden of old debt will increase; if it lowers real interest rates or engages in quantitative easing, the dollar's purchasing power will be diluted, similarly eroding investor confidence. Thus, Dalio describes this as a textbook "unsolvable equation," just waiting for the variables to explode. Dollar hegemony and Federal Reserve independence Besides the apparent predicament, Dalio focuses on the systemic issues in the US. He believes the independence of the Federal Reserve is the final line of defense for the dollar's credibility; if politicians intervene in interest rate decisions for short-term electoral gains (referring to Trump), the Fed's credibility will be damaged, directly reflected in rising US bond yields and reduced foreign investment. When investors doubt that the US will print money to pay its debts, they will seek other hedged assets. In recent years, the White House and Congress's open criticism of monetary policy, even former President Trump threatening to replace the Fed chair, have been viewed by Dalio as typical signs of the "late stage of a big cycle." He warns that historically, monetary hegemony often collapses during internal governance imbalances rather than being replaced unilaterally by external competitors. Populism and "American-style state capitalism" Dalio juxtaposes today’s America with the interwar years of 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 a lasting consensus, resulting in deepening government intervention in business and markets. The government's strategy of holding shares in strategic industries and restricting investment and exports under the guise of national security is rewriting the narrative of "free markets." In his view, the greatest risk brought by this "state capitalism" is not a decline in efficiency, but rather distorting market pricing signals. When political intent overwhelms fiscal discipline, capital naturally flows out, and demand for gold and cryptocurrencies rises accordingly. Gold and Bitcoin: a hedging combination in chaotic times Dalio has consistently advocated for diversified asset allocation. He previously suggested allocating about 15% of the investment portfolio to gold and Bitcoin to hedge against fiat depreciation. Gold is a debt-free asset, with a millennium of trust that is hard to erode quickly. Bitcoin, on the other hand, is pegged to the unlimited printing of dollars through a fixed supply mechanism, becoming "digital gold." This is not a panacea, but it can provide important cushioning when the monetary system is under pressure. He also reminds of hidden risks, including regulatory uncertainties in cryptocurrencies, technical flaws, and privacy controversies. However, he believes that if stablecoins are properly regulated, they will not pose systemic risks to the dollar system. He does not advocate for heavily hedging with 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 judgment. Related reports: Returning to "payments": Stablecoins are becoming a new type of dollar for global micro-traders' cross-border payments. 3 billion USD in 7 days: The mysterious trader TechnoRevenant is the new king of on-chain, or a market manipulator? USDe stablecoin welcomes "dividend moment": Fee Switch activation is just one step away, with a market value surpassing 12.5 billion USD. "Dalio: Cryptocurrencies can become a 'substitute currency' for the dollar, and the US debt heart attack is about to explode" This article was first published in BlockTempo, the most influential blockchain news media.
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Bridgewater'ın Dalio'su: Kripto Varlıklar, Dolar'ın "Alternatif Para" Olabilir, ABD Borcu Kalp Krizi Yaşıyor
Dalio, in an exclusive interview on X, bluntly stated 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 from Bridgewater: two major turning points in the king of hedge funds: a fist and McNuggets) (Additional context: Dalio's "official retirement": liquidating the last holdings and resigning from board positions) Ray Dalio, founder of Bridgewater, posted on the X platform today (3), pointing out that the Financial Times misquoted his views in an interview report. He not only rebutted the media but also focused on reiterating his concerns about US debt, the dollar's status, and the global monetary system, essentially sending another warning to the market. Dalio likened the US debt issue to "an impending heart attack," emphasizing that if not addressed promptly, a systemic crisis would be unavoidable. He pointed out that government revenue is about 5 trillion USD, but annual spending reaches as high as 7 trillion USD, plus the need to roll over about 9 trillion USD in maturing debt, with interest alone nearing 1 trillion USD, indicating a significant imbalance in the current financing structure. When will the US debt "heart attack" occur? In Dalio's framework of the "big debt cycle," when debt growth outpaces nominal GDP growth, fiscal policy accumulates like plaque in blood vessels, ultimately obstructing the flow of funds. He estimates that the next three to five years will be a crucial 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, initiating a vicious cycle. The Federal Reserve is at a loss in this situation. If it raises rates to curb inflation, the burden of old debt will increase; if it lowers real interest rates or engages in quantitative easing, the dollar's purchasing power will be diluted, similarly eroding investor confidence. Thus, Dalio describes this as a textbook "unsolvable equation," just waiting for the variables to explode. Dollar hegemony and Federal Reserve independence Besides the apparent predicament, Dalio focuses on the systemic issues in the US. He believes the independence of the Federal Reserve is the final line of defense for the dollar's credibility; if politicians intervene in interest rate decisions for short-term electoral gains (referring to Trump), the Fed's credibility will be damaged, directly reflected in rising US bond yields and reduced foreign investment. When investors doubt that the US will print money to pay its debts, they will seek other hedged assets. In recent years, the White House and Congress's open criticism of monetary policy, even former President Trump threatening to replace the Fed chair, have been viewed by Dalio as typical signs of the "late stage of a big cycle." He warns that historically, monetary hegemony often collapses during internal governance imbalances rather than being replaced unilaterally by external competitors. Populism and "American-style state capitalism" Dalio juxtaposes today’s America with the interwar years of 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 a lasting consensus, resulting in deepening government intervention in business and markets. The government's strategy of holding shares in strategic industries and restricting investment and exports under the guise of national security is rewriting the narrative of "free markets." In his view, the greatest risk brought by this "state capitalism" is not a decline in efficiency, but rather distorting market pricing signals. When political intent overwhelms fiscal discipline, capital naturally flows out, and demand for gold and cryptocurrencies rises accordingly. Gold and Bitcoin: a hedging combination in chaotic times Dalio has consistently advocated for diversified asset allocation. He previously suggested allocating about 15% of the investment portfolio to gold and Bitcoin to hedge against fiat depreciation. Gold is a debt-free asset, with a millennium of trust that is hard to erode quickly. Bitcoin, on the other hand, is pegged to the unlimited printing of dollars through a fixed supply mechanism, becoming "digital gold." This is not a panacea, but it can provide important cushioning when the monetary system is under pressure. He also reminds of hidden risks, including regulatory uncertainties in cryptocurrencies, technical flaws, and privacy controversies. However, he believes that if stablecoins are properly regulated, they will not pose systemic risks to the dollar system. He does not advocate for heavily hedging with 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 judgment. Related reports: Returning to "payments": Stablecoins are becoming a new type of dollar for global micro-traders' cross-border payments. 3 billion USD in 7 days: The mysterious trader TechnoRevenant is the new king of on-chain, or a market manipulator? USDe stablecoin welcomes "dividend moment": Fee Switch activation is just one step away, with a market value surpassing 12.5 billion USD. "Dalio: Cryptocurrencies can become a 'substitute currency' for the dollar, and the US debt heart attack is about to explode" This article was first published in BlockTempo, the most influential blockchain news media.