Dalio: Worldwide Debt Troubles Erode Confidence in Fiat, Prompting Move Toward Gold and Alternative Assets

Ray Dalio, the founder of Bridgewater Associates, has once again emphasized his belief that gold and alternative, non-fiat currencies will become increasingly crucial as global debt burdens, especially in the U.S., worsen. Speaking at the FutureChina Global Forum 2025, Dalio described the U.S. government’s fiscal trajectory as “unsustainable,” noting that expenditures exceed revenues by a factor of six. According to Dalio, the U.S. is projected to spend $7 trillion in 2025 while generating only $5 trillion in income, resulting in a $2 trillion deficit. Including interest obligations and maturing debt, the government would need to issue another $12 trillion in debt, but international demand is lacking, creating a significant imbalance between supply and demand.

Dalio pointed out that leading global currencies are at risk of losing value due to unchecked government borrowing and spending. He argued that this situation undermines confidence in fiat currencies as reliable measures of value, prompting investors to look to alternatives such as gold and non-fiat assets. “Non-fiat currencies will increasingly serve as essential stores of wealth and mediums of exchange,” Dalio remarked, recommending that investors allocate around 10% of their portfolios to gold for protection. This advice resonates with recent movements in the market, as gold prices have climbed above $3,700 per ounce, highlighting growing interest in secure assets.

Although the U.S. dollar remains the leading global currency for transactions, it is encountering challenges as international commerce becomes more diverse. Dalio mentioned that the dollar index has dropped 10% so far this year, and other major currencies have similarly declined relative to gold. He also recognized the Chinese yuan’s expanding influence in global trade, but maintained that the dollar’s dominance is currently unthreatened. Nevertheless, Dalio cautioned that the fiscal issues facing the U.S. could undermine faith in the dollar’s long-term reliability, especially since countries like France, Japan, and China are also grappling with considerable debt concerns.

Non-fiat assets, such as cryptocurrencies like

, are increasingly seen as viable alternatives to conventional investments. While Dalio did not specifically mention cryptocurrencies, he highlighted the growing appeal of assets that are not subject to inflation. This trend is evident in the markets, with both Bitcoin and gold appreciating as investors seek ways to hedge against inflation and economic instability. Experts observe that Bitcoin’s properties are consistent with Dalio’s perspective, acting as a decentralized and limited-supply asset. Likewise, silver has reached its highest value since 2011, indicating a broader shift in investor behavior.

Dalio’s warnings have implications that go beyond just the U.S. fiscal outlook. He emphasized that the world’s monetary system is under threat, as unchecked debt accumulation puts the stability of several economies at risk. Major investors are already adjusting their portfolios, boosting holdings in gold and non-fiat assets. This shift has led to increased trading activity in both cryptocurrency and gold markets, with digital assets like Bitcoin and

seeing heightened interest amid ongoing economic uncertainties.

Importantly, Dalio’s analysis highlights the urgent need for comprehensive reforms to correct fiscal imbalances. He suggested that the U.S. should aim to reduce its fiscal deficit to 3% of GDP, but noted that political gridlock has stalled meaningful progress. With former President Donald Trump’s proposed tax and spending package projected to add $3.4 trillion to the national debt over the coming decade, doubts about fiscal sustainability persist. Dalio argued that the continued unwillingness of policymakers to rein in spending increases the risk of a fiscal crisis that could destabilize the global financial landscape.

As discussions about alternative assets become more prominent, Dalio’s support for gold and non-fiat currencies signals a broader change in investment approaches. The combination of mounting debt, currency depreciation threats, and a growing institutional appetite for safe assets suggests that non-fiat currencies may assume a more significant role in the world economy. However, the future will depend on policy choices and whether markets believe governments can effectively address their fiscal problems.