Ray Dalio believes we are going to experience a debt crisis in the next two years. Here's what he's investing in. By Bradley Saacks You're currently following this author!
Click to unsubscribe from email alerts. Billionaire Ray Dalio is worried about the world's debt. WEF Billionaire Ray Dalio is no stranger to predicting bubbles or crises , and he sees another storm brewing on the horizon.
The founder of hedge fund Bridgewater Associates said the supply and demand for debt in the world is out of balance and will spiral into a crisis "somewhere in the next two years." Speaking in a virtual interview at the annual Greenwich Economic Forum on Tuesday, the longtime investor said he's short debt as governments and large-scale tech companies flood the market with paper while institutional buyers, such as China and Japan, pull back. "We are certainly in a risky period," the author of "How Countries Go Broke" said. Dalio warned in an earlier interview that the US is approaching the limits of how much debt it can sustain, as rising interest costs consume a growing share of government spending.
He has also said geopolitical tensions are weighing on foreign demand for US debt. Beyond his bet against bonds, Dalio said an ideally diversified portfolio would have between 5% and 15% in gold. He has a small amount, around 1%, allocated to bitcoin, though he said he's not a supporter, especially as artificial intelligence models have shown their abilities to break into digital strongholds.
Dalio, who relocated his family office to Abu Dhabi in 2023, is also looking outside the US for diversification. He said "surplus countries" like Singapore and the United Arab Emirates, which are cash-rich and don't rely on foreign borrowing, have attractive profiles, as well as isolated opportunities across Europe. "Are they innovative?
Are they on the wave or are they being swept away?" Dalio said about evaluating countries' potential. He also talked up inflation-indexed bonds, which rise and fall with inflation, as a hedge against sticky cost increases. "What you don't know is greater than anything you do know," he said.
"But I do think we have a debt issue." Get the latest Gold price here. Read next Bradley Saacks You're currently following this author! Click to unsubscribe from email alerts.
Bradley Saacks covers hedge funds and other asset managers for Business Insider from New York. He first wrote about the multi-trillion-dollar industry for Business Insider from New York in late 2018, after spending two years covering mutual funds for the Financial Times' trade publication, Ignites. He left Business Insider for a little over a year, starting in mid-2022, and worked as a business reporter for Semafor, a media startup.
He rejoined Business Insider in 2023, this time in the publication's London office, and has since relocated back to New York. A graduate of the University of North Carolina at Chapel Hill's School of Media and Journalism, he was the recipient of the O.J. Skipper Coffin Award, which is given to the top graduating senior in the reporting track.
During his time at Business Insider, he has broken news on the biggest names in hedge funds, including Paul Singer's Elliott Management, Ken Griffin's Citadel, Seth Klarman's Baupost Group, and more. He is interested in telling stories about the people behind the scenes who are driving big changes at the biggest firms. He can be reached on WhatsApp and Signal at +1 919 816 5537 .
Notable stories include : 'Trading too much and not investing enough': Dmitry Balyasny on why he's remade the hedge fund's equities team Why Gordon Singer is more powerful than ever at his father's $70 billion firm Jain Global, the most anticipated new hedge fund in years, is about to make its debut. An architect of the manager explains how it will be different. How $65 billion Marshall Wace is turning into the hedge funds it's criticized How ExodusPoint — the biggest hedge fund launch in history — continues to amass billions despite lackluster returns Inside the day-trader revolution that rocked the nation last year — and how it's changed the way Wall Street does business Meet Jim Mooney, the most powerful man you never heard of at $31 billion Baupost and heir apparent to the value-investing titan Seth Klarman Inside the Chicago hedge fund turf war between billionaire Ken Griffin and Dmitry Balyasny Hedge Funds Gold Billionaire More Investing
Source: Business Insider
