Ray Dalio Warns of Potential U.S. Debt Crisis in Three Years

Bridgewater Associates founder Ray Dalio warned in an interview with Bloomberg that the U.S. could face a debt crisis in the next three years as rising interest payments squeeze other federal budget areas. Dalio pointed out that the U.S. government has an annual revenue of about $5.5 trillion and expenditures of about $7.5 trillion, resulting in a fiscal deficit nearing $2 trillion. Currently, the U.S. federal government spends about $1 trillion annually on interest payments, and when including maturing debt that needs refinancing, the total annual debt repayment and refinancing needs amount to approximately $11 trillion. Meanwhile, U.S. Treasury yields continue to rise, with the 10-year Treasury yield closing at 5.31% on October 5 and the 30-year yield reaching 5.66%, further increasing the government's financing pressure. Dalio suggested reducing spending, increasing tax revenues, and lowering interest rates to bring the fiscal deficit as a percentage of GDP down from about 6% to 3%. In terms of asset allocation, he recommended allocating 10% to 15% of investment portfolios to gold, while Bitcoin should only represent a small portion.

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