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DAVOS, Switzerland – Billionaire investor Ray Dalio believes the inflated US debt position could end up devaluing the dollar (Dx = f) as a store of value.
So it’s time to think about the broader acceptance of alternative money such as crypto.
“We have a situation where we have too much debt and we are producing it at a rapid pace. So yes, we need to think about alternative funds,” the founder of Bridgewater Associates said on Yahoo Finance Opening offer podcast at World Economic Forum in Davos, Switzerland (video above; listen below).
Dalio added: “And by the way, it’s not individuals thinking about this. It’s countries and central bankers thinking about it. And other assets in terms of mixing are a reality.”
Bitcoin prices have risen 165% over the past year, climbing over $100,000 per coin after Donald Trump won re-election in November. The new administration is expected to be vastly friendlier to the crypto world. Trump and his wife, Melania Trump, have even posted their own meme pieces.
Dalio stepped down as CEO of Bridgewater Associates in 2017 and returned control of the company in October 2022. His current role with the company includes mentoring the committee that has oversight of the Company investment strategies.
The investment veteran, with a estimated net worth of 14 billion dollars, it is no stranger to doing against the grain market and economic appeals. Some unfolded; Others haven’t yet – if at all.
In an interview in April 2022Dalio warned me of a period of stagflation – or slow growth and high inflation. It hasn’t really gone well from a growth perspective as the world has recovered from the Covid-19 pandemic. However, global economies continue to struggle with high levels of inflation which serve consumer purchasing power.
Most recently, Dalio has drawn attention to the country’s Lourain deficit, which reached a staggering $1.8 trillion in fiscal year 2024. He shares more of his debt concerns in a new online book titled “How countries broke apart. “
Worst-case scenarios for US debt (like a major inflation outbreak) have not happened. But markets aren’t ignoring the problem, with the Trump administration likely adding to debt levels by extending its signature tax cuts.
Dalio thinks the 10-year Treasury yield now hovering near 5% is just the start of its climb, which could weigh on stocks and support more rotation into areas like crypto.
