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DAVOS, SWITZERLAND — A billionaire investor Ray Dalio believes that the inflated debt position of the USA could end up with a devaluation of the dollar (DX=F) as a store of value.
Therefore, it is time to think about the wider acceptance of alternative money such as crypto.
“We have a situation where we have too much debt and we’re producing it at a high rate. So yes, we have to think about alternative money,” the Bridgewater Associates founder told Yahoo Finance Initial offer podcast on World Economic Forum in Davos, Switzerland (video above; listen below).
Dalio added, “By the way, these are not individuals just thinking about it. These are countries and central bankers thinking about it. Changing and holding bonds and debt as assets, and buying gold and other assets in terms of the mix is a reality.”
Bitcoin prices have risen 165% in the past year, climbing over $100,000 per coin after Donald Trump was re-elected in November. The new administration is expected to be friendlier to the crypto world. Trump and his wife Melania Trump even issued their own meme coins.
Dalio stepped down as CEO of Bridgewater Associates in 2017 and handed over control of the company in October 2022. His current role at the company includes mentoring the board that oversees investment strategies of companies.
Investment veteran, with an estimated net worth of $14 billion, is no stranger to making market and economic calls against everything. Some succeeded; others haven’t yet—if at all.
In an interview from April 2022Dalio warned me about a period of stagflation — that is, slow growth and high inflation. That didn’t exactly show from a growth standpoint as the world recovered from the COVID-19 pandemic. However, global economies continue to struggle with elevated levels of inflation that are consumer purchasing power.
More recently, Dalio has drawn attention to the country’s burdensome deficit, which has reached a staggering $1.8 trillion in fiscal year 2024. He’s sharing more about his debt worries with a new online book called “How countries go bankrupt.”
The worst possible scenarios about the US debt (such as high inflation) have not happened. But markets are not ignoring the issue, with the Trump administration likely to increase debt levels by extending his signature tax cuts.
Dalio sees the 10-year bond yield now hovering near 5% as just the beginning of its ascent, which could weigh on stocks and support more rotation in areas like crypto.
