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DAVOS, SWITZERLAND — Billionaire investor Ray Dalio thinks the bloated US debt place may find yourself devaluing the greenback (DX=F) as a retailer of worth.
So it is time to consider wider acceptance of different cash equivalent to crypto.
“We now have a state of affairs the place we’ve got an excessive amount of debt and we’re producing it at a quick tempo. So sure, we’ve got to consider different monies,” the Bridgewater Associates founder mentioned on Yahoo Finance’s Opening Bid podcast on the World Financial Discussion board in Davos, Switzerland (video above; pay attention beneath).
Dalio added, “And by the best way, this isn’t people who’re simply excited about it. These are nations and central bankers who’re excited about it. The altering and the holdings of bonds and debt as an asset, and the shopping for of gold and different belongings when it comes to the combination is a actuality.”
Bitcoin costs have boomed 165% up to now yr, climbing over $100,000 per coin after Donald Trump gained his re-election in November. The brand new administration is broadly anticipated to be extra pleasant to the crypto world. Trump and his spouse, Melania Trump, have even launched their very own meme cash.
Dalio stepped down as CEO of Bridgewater Associates in 2017 and handed over management of the agency in October 2022. His present position with the agency contains mentoring the committee that has oversight over the corporate’s funding methods.
The funding veteran, with an estimated web price of $14 billion, isn’t any stranger to creating against-the-grain market and financial calls. Some have panned out; others have not but — if in any respect.
In an April 2022 interview, Dalio warned me a couple of interval of stagflation — or sluggish progress and excessive inflation. That did not precisely pan out from a progress standpoint because the world recovered from the COVID-19 pandemic. Nonetheless, world economies proceed to grapple with elevated ranges of inflation which might be crimping shopper buying energy.
Extra not too long ago, Dalio has been calling consideration to the nation’s burdensome deficit, which hit a staggering $1.8 trillion in fiscal yr 2024. He shares extra of his debt issues in a brand new on-line guide referred to as “How Nations Go Broke.”
Worst-case eventualities on the US debt (equivalent to a serious inflation outbreak) have not occurred. However the markets should not ignoring the problem, with the Trump administration possible including to debt ranges by extending his signature tax cuts.
Dalio thinks the 10-year Treasury yield now hovering close to 5% is simply the beginning of its ascent, which may weigh on shares and assist a higher rotation into areas like crypto.