Ray Dalio Warns US Faces “Debt Death Spiral” as Interest Costs Surge

Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, warned that the United States is heading toward a “debt death spiral,” in which the government borrows money simply to pay interest on existing debt, according to a CBS News report.

Investor Ray Dalio has warned about rising U.S. debt levels.

With the United States spending roughly $3 billion per day on interest payments, Dalio said the scenario no longer appears purely theoretical.

“There won’t be a default — the central bank will come in and we’ll print the money and buy it,” Dalio said.

“And that’s where there’s the depreciation of money.”

In other words, the government may never technically run out of dollars, but the purchasing power of those dollars could weaken significantly.

According to the Federal Reserve Bank of Minneapolis, $100 in 2025 had the same purchasing power as about $12.06 in 1970, reflecting the long-term effects of inflation.

Dalio emphasized diversification as a way for investors to protect wealth during periods of fiscal uncertainty and highlighted gold as a traditional hedge.

“People don’t have, typically, an adequate amount of gold in their portfolio,” he said. “When bad times come, gold is a very effective diversifier.”