Ray Dalio Warns Of Looming US Debt Crisis, Compares It To a "Potential Heart Attack"

Ray Dalio, the billionaire investor and founder of Bridgewater Associates, boldly claims a looming debt crisis and calls it a “potential heart attack.”

Billionaire investor and Bridgewater Associates founder Ray Dalio has warned that the United States may face a financial crisis in the next few years, as the country continues to cycle through growing debt and debt servicing.

In a statement, Dalio said that once we reach a point in the cycle where one borrows more money to service debt and bond holders say that it’s risky, it becomes a “debt/debt spiral.” By that point, creditors will demand a higher rate of return, which will bring the borrowing to service debt to a halt.

At that point, either the government will have to default on its bonds or print money to service the debt, which will lead to hyperinflation. Both options will bring forth a crisis.

“It’s like a heart attack. If the authorities don’t intervene to prevent it, it will come,” Dalio said.

His insights come as the crypto market cap today dropped to $2.76 trillion in one day.

During the market shakeoff this week, the overall crypto market cap dropped by 8%, while Ethereum and Bitcoin are leading the losers with 11% and 8%.

The US is currently facing growing debt and excessive budget deficits. Recent data shows that the country’s national debt now stands at $33.6 trillion, with a massive deficit of $1.7 trillion in 2023, amounting to 5.8% of the total GDP.

Researchers are also warning about the increasing cost of servicing the debt, which reached $879 billion in 2023. This figure is comparable to the size of the country’s budget for national defense.

In an interview on the Odds Lots podcast, Dalio offered insights into how the general public responds to an economic crisis. He explained that in times of economic uncertainties, many investors are turning to alternative stores of value.

“What’s an alternative to money with a stable supply?” Dalio asked. He highlighted the growing role of Bitcoin and digital assets as leverage against inflation.

suggest that the U.S. government should consider adding Bitcoin and main crypto assets to the strategic reserve. Trump's statement was followed by a spike in crypto prices, with Bitcoin surging to over $90k after revisiting $80k.

While Bitcoin's price soared for the day, its dominance dipped from 55.4% to 50%, indicating a shift in capital to altcoins. Historically, a decline in Bitcoin's dominance catalyzes an altcoin run, which is currently exciting many on social media.

It remains to be seen if Trump will follow through with his statement and propose the inclusion of major crypto assets in the U.S. strategic reserve. However, his announcement has sparked widespread discussion and speculation within the crypto community.

As the world's largest economy grapples with burgeoning debt and the potential for a financial crisis loom, unconventional solutions and pivot points are being sought. In a surprising turn of events, former U.S. President Donald Trump has hinted at the possibility of adding Bitcoin and other cryptocurrencies to the strategic reserve in a statement on Wednesday.

"I am thinking about adding Bitcoin, Ethereum, Solana, Ripple, Cardano, and the best other digital currency to the U.S. strategic reserve in one of my last acts as President, if they want to keep it in the Strategic Reserve afterwards, and perhaps a new term, they can do so!" Trump posted on his social media platform, Truth Social.

In his statement, Trump also expressed his belief that the value of the dollar would be "through the roof" if he were to include crypto assets in the strategic reserve.

"The dollar would become so strong, and they would have no choice but to cancel the 'rate hikes' and begin cutting rates!" he added.

His statement comes as the crypto market is recovering from recent losses, with Bitcoin trading around $80,000.

Trump's announcement is likely to have a significant impact on the crypto market, which has been battered by a series of setbacks in recent months.

The inclusion of crypto assets in the strategic reserve would be a radical move that would signal a major shift in U.S. economic policy. It would also be a personal victory for Trump, who has been a vocal supporter of Bitcoin and other cryptocurrencies throughout his presidency.

It is clear that Trump is still interested in having an impact on U.S. economic policy, even though he is no longer in office. His statement on Wednesday is a reminder that he is still a powerful force in American politics.

Only time will tell if Trump will follow through with his plans to add crypto assets to the strategic reserve. However, his announcement is sure to be a hot topic of discussion in the coming months.

suggest that the U.S. government should consider adding Bitcoin and main crypto assets to the strategic reserve. Trump's statement was followed by a spike in crypto prices, with Bitcoin surging to