The United States, with its cycle of growing debt and debt servicing, may face a financial crisis in the next few years.
Ray Dalio, the billionaire investor and founder of Bridgewater Associates, boldly claims a looming debt crisis and calls it a “potential heart attack.”
In a statement, Dalio argued that once we reach a point in the cycle where one borrows more money to service debt and bond holders say that it’s risky, it becomes a “debt debt spiral.”
Dalio compares the current debt crisis to a heart attack waiting to happen if authorities fail to provide interventions.
Understanding The Current US Debt Issue
Dalio’s insights on the current economic landscape and the country’s looming debt crisis come as the crypto market cap drops to $2.76 trillion in one day. During the market shakeoff this week, the overall crypto market cap dropped by 8%, with Ethereum and Bitcoin leading the losers with 11% and 8%, respectively.
The US is currently facing a growing debt and excessive budget deficits. According to recent data, the country’s national debt is now $33.6 trillion, with a massive deficit of $1.7 trillion in 2023, equal to 5.8% of the total GDP.
Researchers are also warning about the increasing cost of servicing the debt, hitting $879 billion in 2023, comparable to the size of the country’s budget for national defense.
Recognize that conflicts are essential for great relationships because they are how people determine whether their principles are aligned and resolve their differences. pic.twitter.com/MbBpHO76mN
— Ray Dalio (@RayDalio) February 6, 2018
Dalio Says Alternative Stores Of Value Can Help
In an interview on the Odds Lots podcast, Dalio offered insights on how the general public responds to an economic crisis. He mentioned that in times of economic uncertainties, many investors are looking at alternative stores of value.
Dalio asks: What’s an alternative to money with a stable supply? He mentioned the growing role of Bitcoin and digital assets as leverage against inflation.
“Recognize that conflicts are essential for great relationships because they are how people determine whether their principles are aligned and resolve their differences.” he added.
Dalio’s insights followed US President Trump’s announcement on the proposed US strategic reserve, which includes top coins such as Bitcoin, Ethereum, Solana, Ripple, and Cardano.
Trump’s statement was followed by a spike in crypto prices, with Bitcoin surging to over $90k after revisiting $80k.
While Bitcoin’s price surged for the day, its dominance dipped from 55.4% to 50%, reflecting the shift in capital to altcoins. Historically, a decline in Bitcoin’s dominance catalyzes an altcoin run, which now excites many on social media.
Is Bitcoin The Answer?
Although Ray Dalio didn’t categorically mention Bitcoin as the “potential savior”, his recent statements suggest a favorable view on the premier digital asset. Due to its decentralization, Dalio highlighted the asset’s potential as a hedge against economic uncertainties.
Unlike traditional assets governments can confiscate, Bitcoin and other cryptocurrencies work beyond traditional financial mechanisms, promoting wealth preservation. Dalio also acknowledged Bitcoin’s role, insisting that previous economic crises have shown that these assets, while they struggle, still are able to retain their values.
Featured image from Business Standard, chart from TradingView
Christian Encila
They say journalists never truly clock out. But for Christian, that’s not just a metaphor, it’s a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.
Christian’s journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).
Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling – right up his alley!
So, he landed a killer gig at NewsBTC, where he’s one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).
Think Christian’s all work and no play? Not a chance! When he’s not at his computer, you’ll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.
Speaking of chill, Christian’s got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.
Here’s the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day – and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.
Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors – and bosses – he deeply respects.
So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.
Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
