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DAVOS, SWITZERLAND — Billionaire investor Ray Dalio thinks the bloated US debt position could find yourself devaluing the dollar (DX=F) as a store of value.
So it is time to take into consideration wider acceptance of different money corresponding to crypto.
“We’ve got a situation where we’ve an excessive amount of debt and we’re producing it at a quick pace. So yes, we’ve to take into consideration alternative monies,” the Bridgewater Associates founder said on Yahoo Finance’s Opening Bid podcast on the World Economic Forum in Davos, Switzerland (video above; listen below).
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Dalio added, “And by the best way, this shouldn’t be individuals who are only desirous about it. These are countries and central bankers who’re desirous about it. The changing and the holdings of bonds and debt as an asset, and the buying of gold and other assets by way of the combination is a reality.”
Bitcoin prices have boomed 165% previously yr, climbing over $100,000 per coin after Donald Trump won his re-election in November. The brand new administration is widely expected to be more friendly to the crypto world. Trump and his wife, Melania Trump, have even released their very own meme coins.
Dalio stepped down as CEO of Bridgewater Associates in 2017 and handed over control of the firm in October 2022. His current role with the firm includes mentoring the committee that has oversight over the company’s investment strategies.
The investment veteran, with an estimated net price of $14 billion, is not any stranger to creating against-the-grain market and economic calls. Some have panned out; others have not yet — if in any respect.
In an April 2022 interview, Dalio warned me a few period of stagflation — or slow growth and high inflation. That did not exactly pan out from a growth standpoint because the world recovered from the COVID-19 pandemic. Nevertheless, global economies proceed to grapple with elevated levels of inflation which are crimping consumer purchasing power.
More recently, Dalio has been calling attention to the country’s burdensome deficit, which hit a staggering $1.8 trillion in fiscal yr 2024. He shares more of his debt concerns in a recent online book called “How Countries Go Broke.”
Worst-case scenarios on the US debt (corresponding to a significant inflation outbreak) have not occurred. However the markets aren’t ignoring the difficulty, with the Trump administration likely adding to debt levels by extending his signature tax cuts.
Dalio thinks the 10-year Treasury yield now hovering near 5% is just the beginning of its ascent, which could weigh on stocks and support a greater rotation into areas like crypto.