Ray Dalio says US markets risk ‘heart attack,’ – Business News
Famed investor Ray Dalio mentioned American markets are heading for a financial “heart attack” — and gold often is the best drugs.
Speaking at a panel for Abu Dhabi Finance Week, the Bridgewater Associates founder warned that surging US debt prices are clogging the financial system the way in which plaque builds up in arteries.
“A doctor would warn of a heart attack,” he mentioned.
Bridgewater founder Ray Dalio says American markets are heading for a financial “heart attack” — and gold often is the best drugs. Bianca Otero/ZUMA / SplashNews.com
Dalio argued that traders ought to maintain 10% to fifteen% of their portfolios in gold, which he described as uniquely uncorrelated with different belongings.
“Gold tends to rise in crises when other assets fall,” Dalio mentioned.
Dalio’s feedback come as the dear steel trades close to file highs, with spot gold at $3,641.10 per ounce on Thursday morning, up almost 40% year-to-date.
Gold futures opened at $3,680.60 an ounce, placing the commodity on observe for its strongest annual gain in many years.
Dalio has long been one of Wall Street’s most distinguished gold evangelists.
In 2019, he urged traders to “buy gold” to hedge towards international dangers, writing in a LinkedIn essay that the world was coming into a “paradigm shift” of money printing and debt accumulation.
In 2020, during the COVID-19 crash, Dalio mentioned central bank insurance policies would debase currencies and drive traders towards gold.
He repeated the call in 2021, telling CNBC that gold was important insurance coverage in an period of “crazy” money provide growth and geopolitical strains.
Gold’s surge suggests traders are already trying previous equities to hedge their bets. Reuters
Even after stepping down from Bridgewater, the world’s largest hedge fund, in 2022 and promoting his remaining stake this summer time, Dalio has caught to the theme.
On Wednesday, Dalio mentioned that as Washington borrows more closely to fund authorities operations, the fee of servicing debt “squeezes out other spending” simply as clogged arteries prohibit blood move.
“Whose money do you own?” he requested the viewers, warning that traders need to reassess the protection of their holdings in a world “abundant in debt” and rife with political risk.
Dalio’s fellow panelist, Standard Chartered CEO Bill Winters, echoed the priority, saying Europe faces related debt-driven constraints.
“The UK and France are in similar situations but markets have been providing more severe constraints than the US,” Winters mentioned.
Despite these warnings, Wall Street indexes keep climbing. The S&P 500 is up 11% this yr, whereas the Nasdaq has risen 13%, each closing at file highs on Wednesday after softer-than-expected inflation information boosted hopes of a Federal Reserve charge cut subsequent week.
Europe’s STOXX index is up simply over 8% in 2025.
Gold’s surge, nevertheless, suggests traders are already trying previous equities to hedge their bets. Analysts say demand is being pushed by expectations of simpler Fed coverage, geopolitical flashpoints from Ukraine to Taiwan, and considerations about US fiscal sustainability.
Central banks themselves have been heavy consumers, diversifying reserves away from the greenback. China, India and Russia all boosted their gold holdings this yr, in keeping with IMF information.
In 2008, gold jumped more than 5% even because the S&P 500 plunged almost 40%. In 2020, bullion soared above $2,000 an ounce on the peak of the pandemic panic. Now, with costs urgent $3,700, Dalio argues gold stays the last word insurance coverage coverage.
