Bridgewater Associates’ Ray Dalio: Debt Crisis Inevitable, Major National Debts Reach New Highs, Recommends Holding Gold and Bitcoin
Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, and author of the bestsellers *Principles*, *The Big Debt Crisis*, and *The Changing World Order*, recently stated at the Abu Dhabi Finance Week (ADFW) that we are approaching a debt and currency crisis. He warned investors to avoid debt assets and to hold hard currencies such as gold and Bitcoin.
**Debt Levels in Major Countries Have Reached Unprecedented Heights**
According to reports, Ray Dalio stated in his speech at the Abu Dhabi Finance Week in the United Arab Emirates:
“I think we are possibly heading towards a debt and currency problem. I would stay away from debt assets like bonds and other liabilities, and hold some hard currencies like gold and Bitcoin.”
Hard currencies are defined as those linked to tangible commodities, such as gold and silver, or assets like Bitcoin with a stable supply. In contrast, the issuance of currencies like the U.S. dollar is controlled by government policies. Recently, both gold and Bitcoin have hit record highs, with gold primarily driven by geopolitical events leading to demand for a safe haven, while Bitcoin’s rise may be attributed to the open regulatory stance during the Trump administration and even discussions about including Bitcoin in asset reserves.
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Ray Dalio’s *The Big Debt Crisis* is a well-known work that reflects on the events of the 2008 financial crisis a decade later. Using Bridgewater’s unique economic model, Dalio successfully avoided the financial crisis, and this event became one of the key milestones in the firm’s success.
“In the next few years, these countries will be unable to avoid a debt crisis, which will lead to a significant decline in the value of their currencies,” Dalio said. He pointed out that the debt levels of the U.S., China, and all major countries, except for Germany, have reached “unprecedented highs,” and such levels are unsustainable.
Ray Dalio advocates for reducing debt positions, but another prominent investor, Howard Marks of Oaktree Capital, is one of the largest distressed debt investors. Earlier, we reported on Howard Marks’ perspective on debt positions.
**(Analysis of Value Investing Master Howard Marks’ Latest Memo: Thoughts on Asset Allocation – Part 1)**
**(Analysis of Value Investing Master Howard Marks’ Latest Memo: Thoughts on Asset Allocation – Part 2)**
**Debt, Currency, and Economics as One of the Five Forces Driving the World**
Ray Dalio argues that the five major forces driving the world are: “Debt, currency, and economics,” domestic order, power conflicts, the forces of nature, and technology. Regarding how to view things, he added: “Don’t get bogged down in the minutiae of daily news, but instead think more about those big driving forces.” He also emphasized: “You need to think strategically and tactically, adopt a global perspective, and recognize that what you know about the future is far less than what you don’t know.”
The report also mentioned that Ray Dalio opened a branch of his family office in Abu Dhabi last year, marking his entry into the Middle Eastern market. He also praised the Gulf Cooperation Council (GCC), which consists of six member countries: Saudi Arabia, Kuwait, the UAE, Qatar, Bahrain, and Oman.
**(Ray Dalio Steps Down from Bridgewater, No Longer Views Cash as Trash, Reflecting on Bitcoin’s Changing Status)**
**Risk Warning**
Cryptocurrency investments are highly risky, and their prices can be extremely volatile. You may lose your entire principal. Please carefully assess the risks.
