The investor warned that the growing weight of US debt could cause strong economic slowdown. He criticized the loss of attractiveness of treasure bonds and suggested to allocate between 10% and 15% of gold portfolios to protect themselves from instability.
Ray Dalio, founder of Bridgewater Associates, He launched a hard warning about the US economy during his participation in the Financial Week of Abu Dhabi. According to the billionaire investor, The growing debt load from the United States could lead to a strong economic slowdown or even in a financial “heart attack.”
Dalio explained that the increase in debt service costs is draining resources from other essential areas of public spending. “It is like the plate that accumulates in an obstructed circulatory system: if the country allocates more money to pay its debt, other vital expenses are reduced. A doctor would say that this is the prelude to a heart attack,” he graph.
According to data from the Treasury Department, The total US debt first exceeded 37 billion dollars, Ahead of the official projections of the Congress Budget Office (CBO), which anticipated reaching that figure only in 2030. The Coronavirus pandemic triggered public spending and accelerated the trend.
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Before this scenario, Dalio recommended that investors reduce their exposure to treasure bonds —What, he said, the safest asset can no longer be considered – and increase the assignment of gold in their wallets. “A well diversified portfolio should have between 10% and 15% in gold,” he said.
The investor stressed that gold is not correlated with other assets and is usually revalued in crisis periods, when other instruments lose value. He also urged investors to reflect on the quality and origin of their assets in a “abundant in debt” world and with growing geopolitical tensions.
Source: Ambito
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