Ray Dalio has warned of a “pending debt money problem” in global finance
Billionaire investor Ray Dalio has warned of a debt crisis looming over global finance, and urged investors to shift toward assets such as Bitcoin and gold.
Speaking at Abu Dhabi Finance Week in the United Arab Emirates on Tuesday, Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, expressed concern over rising debt levels in major economies, and recommended avoiding debt-based investments.
“I believe that there would likely be a pending debt money problem,” Dalio said on Tuesday, as quoted by the South China Morning Post. “I want to steer away from debt assets like bonds and debt, and have some hard money like gold and Bitcoin.”
Gold and bitcoin have both been trading at near record highs, as investors seek alternatives amid economic headwinds and geopolitical tensions. Bitcoin broke through the long-awaited $100,000 threshold last week amid a rally fueled by investor expectations of crypto-friendly policies from US President-elect Donald Trump.
Dalio highlighted “unprecedented levels” of indebtedness in major economies, including the US and China, and warned that the trend could lead to debt crises in the coming years.
“It is impossible for these countries to be able to not have a debt crisis in the years ahead that will lead to a great decline of [money] value,” Dalio said.
According to the veteran investor, “debt, money and the economy” cumulatively represent one of five big forces, alongside internal politics, global geopolitical order, “acts of nature” and technological advancements, that will drive “just about everything.”
“Don’t get too caught up on the twists and turns of the day-to-day headlines, and instead, think more about the big forces,” he said. “Think strategically as well as tactically, taking a global perspective while recognizing that what you don’t know about the future is more than what you do know.”
Bitcoin has seen a more than 140% price surge in 2024, with a large share of the gains occurring since the US election. Once a crypto skeptic himself, Dalio has emerged as a major supporter of the sector in recent years.
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December 11, 2024 at 11:09PM
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