Ray Dalio, the billionaire founder of Bridgewater Associates, the world’s largest hedge fund, delivered a stark warning regarding the United States’ escalating national debt—and dollar devaluation—during a recent interview on the David Rubenstein Show. With the U.S. fiscal trajectory arguably unsustainable, Dalio predicted the burden will fall heavily on future descendants, stating: “My grandchildren and great grandchildren not yet born, are going to be paying off this debt in devalued dollars.”
A student of financial history, Dalio cited his voluminous studies of historical economic cycles. He argued when nations accumulate excessive debt—which has now grown in the U.S. to a staggering $38 trillion—they rarely resolve the issue through spending cuts or hard defaults. Instead, governments invariably turn to a “combination of devaluing the currency” and the “printing of money.”
“It’s always done when countries essentially go broke,” Dalio said. “They print money, devalue the currency, and create an artificially low interest rate, so that the person who’s holding the bonds is receiving an artificially low interest rate.” He explained this strategy punishes those who hold government bonds by offering them returns that fail to keep pace with real inflation.
