Billionaire Ray Dalio said investors should reduce their bond positions and invest no more than 15% in gold to hedge against the risk of a US debt crisis that he thinks will break out in about three years. Dalio posted that investments should be diversified into various types of assets and countries with strong financial conditions. Dalio proposed low allocating bonds and allocating about 10% to 15% of the portfolio to gold and a “small amount” of Bitcoin. He said that doing so would both reduce risk and increase returns. Dalio has long been vocal about the danger of rising government debt. The yield on US long-term treasury bonds has risen to the highest level in many years, and Japan, its largest creditor, is selling US debt to defend its currency. Treasury Secretary Scott Bessent announced plans to expand long-term bond buybacks this week to curb the sharp decline in bonds, yet this unexpected move has had little effect until now, except for a short time. Dalio estimates that the US government's revenue this year was about 5.5 trillion US dollars, while spending reached 7.5 trillion US dollars, leaving a gap of 2 trillion US dollars. Interest expenses alone would amount to about $1 trillion, in addition to about $10 trillion in debt that would need to be refunded. He predicted that if it does not change course, the US may have a debt crisis “within three years, fluctuating up and down for two years.”

Billionaire Ray Dalio said investors should reduce their bond positions and invest no more than 15% in gold to hedge against the risk of a US debt crisis that he thinks will break out in about three years. Dalio posted that investments should be diversified into various types of assets and countries with strong financial conditions. Dalio proposed low allocating bonds and allocating about 10% to 15% of the portfolio to gold and a “small amount” of Bitcoin. He said that doing so would both reduce risk and increase returns. Dalio has long been vocal about the danger of rising government debt. The yield on US long-term treasury bonds has risen to the highest level in many years, and Japan, its largest creditor, is selling US debt to defend its currency. Treasury Secretary Scott Bessent announced plans to expand long-term bond buybacks this week to curb the sharp decline in bonds, yet this unexpected move has had little effect until now, except for a short time. Dalio estimates that the US government's revenue this year was about 5.5 trillion US dollars, while spending reached 7.5 trillion US dollars, leaving a gap of 2 trillion US dollars. Interest expenses alone would amount to about $1 trillion, in addition to about $10 trillion in debt that would need to be refunded. He predicted that if it does not change course, the US may have a debt crisis “within three years, fluctuating up and down for two years.”