DeutschRay Dalio, founder of the world’s largest hedge fund Bridgewater Associates and for years a supporter of alternative investments such as gold and Bitcoin, is sounding the alarm. According to the financial professional, the US economy is at the end of a massive debt cycle. The continued printing of money is no longer sustainable. The consequence: An “economic heart attack” threatens within the next three years.
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Dalio, who already made headlines with his book “The Changing Monetary System” during the trade war, describes the current situation as critical. The US national debt has reached a point where normal monetary policy no longer works. “New budgets and the associated spending excesses could lead to an economic heart attack in three years. A deviation of 1-2 years is possible,” says Dalio. He points to the US government’s annual interest payments, which now amount to around one trillion dollars, while a total of nine trillion dollars in debt needs to be refinanced. An enormous burden for the economy.
Bitcoin Fan Ray Dalio Warns of “Economic Heart Attack”
Dalio also warns of political pressure on monetary policy. In the past, then-President Donald Trump had urged the US Federal Reserve to cut interest rates. “The independence of central banks is crucial. Politicians always want lower interest rates for their own interests. If this independence disappears, investors will no longer believe in the reality of the markets. Then the value of money will fall in an unhealthy way,” says Dalio. He already sees first warning signs: government bonds are being sold, gold is in demand. According to Dalio, this indicates the end of the existing debt system. Should the Fed give in to political pressure and allow inflation to rise, massive losses would threaten bonds and the US dollar, which would put the entire monetary system under pressure.
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In this context, cryptocurrencies are gaining in importance. Dalio now sees Bitcoin and Co. as a serious alternative to traditional currencies: “Cryptocurrencies have now become alternative currencies. Their supply is limited. Countries with high debt will hardly be able to protect their own currency against devaluation.” Especially in times of high inflation or government debt, digital currencies could thus become more attractive.
“Cryptocurrencies Have Now Become Alternative Currencies”
The hedge fund founder’s warnings are not just numbers and forecasts. They shed light on the fragility of global financial systems and the growing role of cryptocurrencies as a possible hedge. Dalio makes it clear: Anyone who still relies on traditional investments today should be aware of the risks. At the same time, developments show that investors are increasingly relying on gold and digital currencies to protect themselves against the uncertainties of the debt system.
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The next few years could be turbulent for the US economy. Dalio predicts a phase of rising interest rates, inflationary pressure and a revaluation of assets. In this situation, alternative investments such as Bitcoin could become not only a speculative object, but a real hedge against loss of value. (mck)
