Bridgewater Associates founder Ray Dalio is advising investors to move away from bonds and toward gold and Bitcoin to protect against a potential major US debt crisis.
In a LinkedIn post published on Friday, August 21, 2026, Dalio pointed to recent Treasury actions, such as Secretary Scott Bessent's announcement of debt buybacks expected to exceed $4 billion, as indicators of broader financial trouble. According to Dalio, the US is currently spending approximately 40% more than its revenue, with annual income around $5.5 trillion against expenses near $7.5 trillion.
Comparing the government's financial situation to a business, Dalio noted that debt service payments would amount to about $11 trillion, which represents roughly 200% of annual revenue. He stated that the government's financial condition is at a critical inflection point, warning that unmanaged debt accumulation could lead to significant trauma.
To reduce the deficit to 3% of GDP, Dalio outlined a concurrent three-part strategy involving spending cuts, increased tax revenue, and lower interest rates. He cautioned that failing to execute all three measures simultaneously could cause a traumatic economic adjustment.
Dalio estimated that a debt crisis could arrive within one to five years, offering a rough estimate of three years if the current trajectory remains unchanged. To prepare for these risks, he recommended that investors remain underweight in bonds, allocate 10% to 15% of a portfolio to gold, and hold a portion of Bitcoin.
