Bridgewater's Ray Dalio urges gold, bitcoin hedge amid US debt fears

Investors are advised to allocate at least 15 percent of their portfolios to gold and bitcoin as a hedge against rising US debt risks and potential currency depreciation, says Bridgewater Associates founder Ray Dalio.

Dalio highlighted that the US government's spending exceeds its revenue by about 40 percent, with total debt now standing at six times the country's annual income.

He pointed out that annual interest payments on the debt have reached about US$1 trillion (HK$7.8 trillion), accounting for roughly half of the federal budget deficit.

He noted that the US government can only service its ballooning debt by issuing more bonds and relying on the Federal Reserve to effectively print money, a situation that he said is fueling anxiety in financial markets.

Dalio warned that a major market crash could be triggered by either a new round of large-scale quantitative easing or increased government intervention in the operations of the Fed.

As for hedging tools, Dalio said he favors gold over bitcoin, noting that central banks do not treat cryptocurrencies as reserve assets.

STAFF REPORTER