Bridgewater Associates Ray Dalio: Debt crisis is inevitable, the national debt of major countries has reached new heights, and it is recommended to hold gold and BTC

Ray Dalio, founder of the world's largest Hedging fund Bridgewater Associates and author of best-selling books "Principles", "The Big Debt Crises", and "The Changing World Order", recently warned investors at the Abu Dhabi Finance Week (ADFW) that we are about to face a debt currency problem. He cautioned investors to stay away from debt assets and to hold hard currencies such as gold and Bitcoin (BTC).

The debt levels of major countries have reached unprecedented highs

According to reports, Ray Dalio stated in his speech at Abu Dhabi Finance Week in the United Arab Emirates.

"I think we may be facing a debt currency problem soon. I want to stay away from debt assets like bonds and other liabilities and hold some hard currencies like gold and Bitcoin."

The definition of hard currency is pegged to physical commodities, such as gold, silver, or stable targets like BTC. In contrast, the issuance of currencies like the US dollar is controlled by government policies. Recently, both gold and BTC have reached historical highs. The rise in gold prices is mainly due to the demand for hedging against geopolitical events, while the rise in BTC may be influenced by the open attitude towards regulation brought about by Trump's inauguration, and even the intention to include BTC in asset reserves.

(Syrian regime collapsed! President Assad fled, testing Russia's influence in the Middle East)

Ray Dalio's "The Big Debt Crisis" is a well-known work that looks back on the operations during the 2008 financial crisis, ten years after. Ray Dalio, with the company's unique economic model, successfully avoided the financial crisis, and this event also became one of Bridgewater Associates' famous works.

"In the next few years, these countries will not be able to avoid a debt crisis, which will lead to a significant drop in the value of currency." Ray Dalio said. And he stated that the debt levels of the United States, China, and all major countries except Germany have reached "unprecedented highs," a scale that is unsustainable.

Ray Dalio advocates reducing debt positions now, but Howard Marks, a well-known investor at Oaktree Capital, is one of the biggest distressed debt investors. Previously, we had a series of reports on Howard Marks' understanding of debt positions.

Value investing guru Howard Marks' latest memo: Thoughts on asset allocation (Part 1)

Value investing guru Howard Marks' latest memo: Thoughts on asset allocation (Part 2)

Debt, currency, and economy are one of the five driving forces of the world

Ray Dalio advocates that the five major forces driving the world are: 'debt, currency and economy', domestic order, power conflicts, the forces of nature, and technology. When it comes to how to view things, he also said, 'Don't focus too much on the details of daily news, but rather think more about those major driving forces.' And 'adopt a strategic and tactical mindset, take a global perspective, and recognize that you know far more about the unknown future than the known.'

The report also pointed out that Ray Dalio opened his family office branch in Abu Dhabi, the capital of the United Arab Emirates, last year, in order to enter the Middle East market. He also praised the Gulf Cooperation Council (GCC), which is composed of six member states including Saudi Arabia, Kuwait, the UAE, Qatar, Bahrain, and Oman.

(Bridgewater Associates' Ray Dalio steps down and no longer sees cash as trash: a look back at BTC's transformation)

This article, Bridgewater Associates' Ray Dalio: Debt crisis is inevitable, major countries' debt has reached new heights, recommends holding gold and BTC, first appeared in Chain News ABMedia.