Ray Dalio: The US May Face a Debt Crisis Within Three Years

Odaily reports that Ray Dalio, founder of Bridgewater Associates, said on October 6 that the United States may face a debt crisis within three years, with interest expenses squeezing the federal budget. Annual US revenue is about $5.5 trillion, spending is about $7.5 trillion, and the fiscal gap is close to $2 trillion; federal debt held externally by the government is about $32 trillion, with annual interest of about $1 trillion.

The US 10-year Treasury yield closed at 5.31% on October 5, while the 30-year yield was 5.66%. Japan held $1.10 trillion in US Treasuries in July, down from $1.24 trillion in February; its 10-year government bond yield rose to 3.12% on October 1, the highest since August 1996.

Ray Dalio proposed a "3% three-part plan" to reduce the fiscal deficit ratio from about 6% of GDP to 3% by cutting spending, increasing tax revenue, and lowering interest rates; he suggested allocating 10% to 15% of a portfolio to gold and keeping only a small portion in Bitcoin.

On October 6, the price of Bitcoin was about $85,630, about 32% below its all-time high of $126,080 and down about 3.5% year to date; gold futures fell about 4.2% over the same period. (Bitcoin.com News)