US Debt Crisis Warning from Ray Dalio: I Expect It in 2-3 Years

Ray Dalio, the founder of Bridgewater Associates, one of the largest and most successful hedge fund companies of the time, answered Bloomberg's questions at an event held in Singapore. Commenting on the increase in bonds in his long interview, Dalio particularly drew attention to the impact of the debt crisis.

“Yes, I expect it within 3 years at the latest.”

Dalio, who has warned of a debt crisis many times before and even stated that he invested in gold to take precautions here, stated that he expects the USA to enter a debt crisis within 2 to 3 years, although he did not mention this issue in this interview:

"Yes, I expect a debt crisis within 2 to 3 years. The USA spends approximately 7 trillion dollars a year and earns 5 trillion dollars of income. It is like a person or a company that constantly spends more than its income... Debt and the interest cost of debt are gradually increasing. In fact, the system in countries works the same as in individuals, but the only difference is that countries can print money. We constantly spend money, we reach the limit and we increase that limit."

“China and Japan do not want it anymore”

Stating that 1/3 of the US debt comes from foreign investors, Dalio also emphasized the influence of China and Japan here:

"The USA is eager for new debt, but not China, not Japan. In addition to the economic problems with China, there are also geopolitical problems. They do not want to buy new US bonds. You are both a competitor and a debtor... This creates a very difficult balance. Japan also spent a lot of money on US bonds. They lent a lot, but now they want to take back some of it. 1/3 of the money we borrow comes from foreigners. And they do not want to buy it as before. All this increases bond interest rates."