Billionaire investor Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates, said he would invest in “hard money” like gold and bitcoin while avoiding debt assets, as most major economies face rising indebtedness problems.
“I believe that there would likely be a pending debt money problem,” he said in a speech at a financial conference in Abu Dhabi on Tuesday. “I want to steer away from debt assets like bonds and debt, and have some hard money like gold and bitcoin.”
Gold and bitcoin have both been trading near record highs as investors seek hedges against economic uncertainties, geopolitical tensions and new monetary policies. Bitcoin surged past US$100,000 for the first time last week amid US president-elect Donald Trump’s welcoming rhetoric towards the digital asset. Hard money refers to a currency backed by a physical commodity like gold and silver, or bitcoin for its stable and controlled supply.
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He added that the indebtedness seen in the US, China and all major countries except Germany has increased at “unprecedented levels” and the amount will not be sustainable.
“It is impossible for these countries to be able to not have a debt crisis in the years ahead that will lead to a great decline of [money] value,” Dalio said.
“Debt, money and the economy” represent one of five big forces he has identified that will drive “just about everything”, he said.
The other forces include countries’ internal political order, driven by wealth and value gaps, and external geopolitical order, stemming from power conflicts such as US-China tensions.
“Acts of nature” such as droughts, floods, pandemics and climate change are the fourth category, while the fifth is the invention of new technologies.
Gold and bitcoin are trading near records highs as investors try to hedge economic uncertainties. Photo: Shutterstock alt=Gold and bitcoin are trading near records highs as investors try to hedge economic uncertainties. Photo: Shutterstock>
On disruptive technology, Dalio said he wants to invest in companies that are using it to improve their businesses rather than companies that are selling the most products or services.
Dalio relinquished control of Bridgewater in October 2022, after stepping down as CEO in 2017 and chairman in 2021. His current role involves mentoring the committee that has oversight over the firm’s investment strategies.
