Ray Dalio Warns of U.S. Fiscal Crisis in 1-5 Years, Advises Gold and Bitcoin

Bridgewater Associates founder Ray Dalio has warned that a U.S. debt crisis could erupt within one year or at latest within five years, most likely in about three years absent policy change. He called on investors to significantly cut bond holdings, allocate 10% to 15% of portfolios to gold, and hold a small Bitcoin position to hedge currency depreciation and inflation. Dalio detailed U.S. government revenue of $5.5 trillion against spending of $7.5 trillion this year, yielding a $2 trillion fiscal gap, with interest payments nearing $1 trillion and $10 trillion in debt needing refinancing. He likened the U.S. to a corporation where annual debt servicing costs total $11 trillion or about 200% of revenue. Dalio advocated a three-pronged strategy of cutting spending, raising taxes, and lowering interest rates to compress the deficit from 6% to 3% of GDP, stressing all measures must be implemented simultaneously and carefully. He expressed skepticism toward artificial rate suppression by the Federal Reserve and noted similar fiscal pressures in the UK and Japan. The comments align with rising long-term Treasury yields, Japan's continued sales of U.S. debt, and the Treasury's expanded long-dated buyback operations. The warning comes as gold reaches its highest level since May and Bitcoin breaks above $77,000 on track for its strongest weekly gain since 2023.