Dalio Warns of Impending U.S. Fiscal Crisis, Advocates Gold and Non-Fiat Currencies

Ray Dalio, the renowned founder of Bridgewater Associates, issued a stark warning today regarding the unsustainable trajectory of U.S. government debt, asserting that gold and non-fiat currencies are poised to become superior stores of value. Speaking at the FutureChina Global Forum 2025, Dalio highlighted the severe risks of currency devaluation as global governments, particularly the U.S., continue excessive spending without adequate fiscal restraint.

Dalio described the U.S. government’s fiscal situation as “unsustainable,” facing a major crisis that threatens its monetary order. He pointed out that the U.S. debt is now six times its income, necessitating an estimated $12 trillion in additional debt sales to cover a $2 trillion deficit, $1 trillion in interest payments, and $9 trillion in maturing borrowings. This massive requirement faces a significant “supply-demand imbalance” in the market, as global demand cannot meet this scale of issuance.

The veteran investor urged individuals to diversify their portfolios, recommending approximately 10% allocation to gold. He noted that while the U.S. dollar has depreciated against other major currencies this year, gold has simultaneously strengthened, solidifying its position as the world’s second-largest reserve currency.

Ng Kok Song, founding partner and chairman of Avanda Investment Management, echoed Dalio’s concerns on the same panel, stating that the unsustainability of U.S. debt has reached a “tipping point.” He also emphasized that similar fiscal risks are prevalent in other major economies, including France, Japan, and China. Dalio reiterated that despite these challenges, the U.S. dollar will likely maintain its role as a primary medium of exchange, though the rising influence of the Chinese yuan in global trade could diminish its overall dominance.

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