'Hedge Fund Pioneer' Dalio: "US Debt Risk... Need for Overseas Diversification"

Warning of Debt, International Conflicts, and Political Polarization

Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund, argued that risk factors such as the increase in the U.S. national debt could impact U.S. Treasury bonds, and investors should diversify their funds overseas.

On the 16th (local time), Dalio stated in an interview with major media outlets, "The United States is still the world's leading region in capitalism and innovation, but the risks facing the U.S. are increasing, so geographic diversification is necessary."

Founder of Bridgewater Associates, the world's largest hedge fund, Ray Dalio
[Photo by Reuters]

He described Singapore, Indonesia, Malaysia, Vietnam, and some Gulf countries as attractive investment destinations, saying, "They have more income than expenditure, excellent balance sheets, internal order, and are neutral in geopolitical conflicts." He also added that gold is a good means of risk diversification.

Dalio warned about the U.S. debt burden, international conflicts, and political polarization. He said, "Concerns about U.S. Treasury bonds are growing due to increased debt caused by high interest rates," and "especially, demand from foreign investors who worry about the U.S. debt situation and the possibility of additional sanctions is weakening." If the U.S. expands sanctions to other countries following those imposed on Russia after the invasion of Ukraine, global investment demand for Treasury bonds could decline. The U.S. Congressional Budget Office projects that in 10 years, the U.S. debt-to-GDP ratio will exceed 106%, the highest level since World War II, and continue to rise.

He also compared the deepening political polarization to a "civil war," estimating the risk of civil war occurring in the U.S. to be between 35% and 40%. He explained, "It won't be a war with guns, but a conflict where people move to other states that align with their desired policies and refuse to comply with opposing federal government decisions." Dalio said, "We are now standing on the edge of a cliff," and described the upcoming November U.S. presidential election as the most important election of his life.

This content was produced with the assistance of AI translation services.