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Ray Dalio warns of potential US debt crisis within three years

Dalio estimates this year’s US deficit at about $2tn, based on $5.5tn in revenue versus roughly $7.5tn in spending.

Reported · Written up by our desk · Economy

Bridgewater Associates founder Ray Dalio warned that the US could face a debt crisis within the next three years, with an estimated margin of error of about two years, in comments shared via a LinkedIn post dated 21 August, according to Hedgeweek. Dalio pointed to the widening gap between federal revenues and spending as a key risk factor. He estimated the government will collect about $5.5tn in revenue this year while spending could reach around $7.5tn, implying a deficit of roughly $2tn, the outlet said. He also cited rising costs of servicing existing debt. Dalio estimated annual net interest payments are already about $1tn, adding further pressure as borrowing requirements continue to increase. Dalio argued that the scale of US borrowing could eventually undermine confidence in the dollar and the Treasury market, with spillovers beyond the US economy, and recommended investors consider higher allocations to assets such as gold and bitcoin as potential protection, Hedgeweek reported. The warning arrives as investors watch Treasury efforts to manage elevated borrowing costs, including measures by Treasury Secretary Scott Bessent to influence the Treasury market, such as increasing purchases of longer-dated government bonds through the department’s buyback program.

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