Bridgewater Associates founder Ray Dalio warned in an interview with Bloomberg, as cited by Bitcoin.com, that the United States could face a debt crisis within the next three years as rising interest costs keep squeezing out other areas of the federal budget. Dalio said the US government brings in about $5.5 trillion in annual revenue while spending roughly $7.5 trillion, leaving a fiscal deficit close to $2 trillion. He added that annual federal interest expense is now around $1 trillion, and when maturing debt that must be refinanced is included, total annual debt service and refinancing needs reach about $11 trillion. At the same time, Treasury yields have continued to rise, with the 10-year US Treasury yield closing at 5.31% on Oct. 5 and the 30-year yield reaching 5.66%, adding to funding pressure. Dalio said the deficit-to-GDP ratio should be reduced from about 6% to 3% through lower spending, higher tax revenue and lower interest rates. On portfolio allocation, he had previously said 10% to 15% should be placed in gold, while Bitcoin should account for only a smaller share.
Bridgewater Associates founder Ray Dalio warned in an interview with Bloomberg, cited by Bitcoin.com, that the United States could face a debt crisis within the next three years as debt interest costs keep crowding out other parts of the federal budget.
Dalio said the US government takes in about $5.5 trillion a year and spends about $7.5 trillion, leaving a fiscal deficit close to $2 trillion. He added that annual federal interest expense is around $1 trillion. Once maturing debt that needs to be refinanced is included, total annual debt service and refinancing needs come to about $11 trillion.
US Treasury yields have also kept moving higher. The 10-year Treasury yield closed at 5.31% on Oct. 5, while the 30-year yield reached 5.66%, increasing the government's financing pressure.
Dalio said the fiscal deficit as a share of GDP should be reduced from about 6% to 3% by cutting spending, raising tax revenue and lowering interest rates. On asset allocation, he had previously recommended putting 10% to 15% of a portfolio into gold, with Bitcoin taking only a smaller allocation.
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