Bridgewater founder Ray Dalio warned that gold and non-fiat currencies will gain appeal as global debt burdens grow and major currencies risk devaluation. Speaking at the FutureChina Global Forum, he described U.S. government spending and borrowing as “unsustainable,” saying the country faces a looming fiscal crisis that threatens the global monetary system.
Dalio argued that when governments resist curbing excessive deficits, traditional currencies lose reliability as stores of wealth, making diversification into gold more compelling. He recommended investors allocate about 10% of portfolios to gold. He also noted the dollar has fallen over 10% this year and that even other major currencies have weakened against gold, which he called the world’s second-largest reserve currency.
Citing U.S. fiscal strains, Dalio said Washington may need to issue $12 trillion in debt to cover deficits, interest payments, and maturing borrowings, creating a supply-demand imbalance in markets. He said he urged lawmakers to cut the deficit to 3% of GDP, but political reluctance and Trump’s latest tax-and-spend package — which adds $3.4 trillion to debt — worsen the outlook.
While Dalio said the dollar will remain the primary medium of exchange, he noted China’s growing role in trade will chip away at its dominance. Ng Kok Song of Avanda Investment Management echoed the concerns, saying U.S. debt has reached a tipping point and warning that other countries, including France, Japan and China, face similar risks.
