Billionaire investor, Ray Dalio, has cautioned about an impending debt crisis in global finance and advised investors to consider shifting to assets like Bitcoin and gold.
Bitcoin has gained more than 120% in 2024, rising from $44,000 at the beginning of the year to surpass the $100,000 mark in December 2024. Gold is also trading at record highs.
MILESTONE | #Bitcoin Surpasses the $100,000 Mark for the First Time in History
Since the start of 2024, Bitcoin is up by over 120% and by over 50% in the last one month since the election victory of U.S. President Donald Trump.https://t.co/Zc1PC4lDbM #Bitcoin100K pic.twitter.com/GnJYFtHqS4
— BitKE (@BitcoinKE) December 5, 2024
Speaking at Abu Dhabi Finance Week event recently, Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, voiced concerns about increasing debt levels in major economies and advised against investing in debt-based assets.
“I believe that there would likely be a pending debt money problem,” Dalio said, as quoted by the South China Morning Post.
“I want to steer away from debt assets like bonds and debt, and have some hard money like gold and Bitcoin.”
Dalio emphasized the ‘unprecedented levels’ of debt in major economies such as the U.S. and China, cautioning that this trend could result in debt crises in the years ahead.
“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.
According to estimates from the International Monetary Fund (IMF), public debt levels have risen in 2024 across the United States, the EU, and China.
In 2024:
- U.S. government debt is projected to reach 121% of GDP, while
- China’s debt is expected to hit 90.1% of GDP, and
- The EU’s debt is estimated at 82.7% of GDP
According to the IMF, public debt could approach 100% of global GDP by 2030.
GLOBAL | Total Global Debt to Surpass $100 Trillion, 93% of Global GDP, By End of 2024, Warns IMF
IMF also warns of possible 115% of GDP debt levels within 3 years driven by slower growth, tighter financial conditions, and policy uncertainties.https://t.co/XE1JBvd60Y @IMFNews pic.twitter.com/FJG0AJFmpy
— BitKE (@BitcoinKE) October 21, 2024
Meanwhile, African countries dedicating 65% of their GDP to servicing debt obligations according to the head of the African Development Bank, Akinwumi Adesina.
Africa’s $824 Billion Debt Burden and Opaque Resource-Backed Loans Hinder its Potential, African Development Bank President Warns
The continent would pay $74 billion in debt service payments this year [2024] alone, a sharp increase from $17 billion in 2010.… pic.twitter.com/2M7Dy1wP4J
— BitKE (@BitcoinKE) April 24, 2024
This comes as governments on the continent have largely shifted from concessional financing to more expensive and short-term commercial debt, with Eurobond debt now accounting for 44% of Africa’s total debt, up from 14-17% previously.
Côte d’Ivoire, Benin, and Kenya have issued almost $5 billion in bonds since the beginning of 2024, at interest rates ranging from 8 to 10 percent.
According to Adesina, the continent would pay $74 billion in debt service payments in 2024 alone, a sharp increase from $17 billion in 2010.
At the same time, South Africa, the continent’s most advanced economy registered its largest budget deficit in nearly 20 years in 2023.
🇿🇦 TAXATION | Remote Workers Targeted as South Africa Records Largest Budget Deficit Since 2004
South Africa has emerged as a popular destination for remote work due to the relatively low cost of living and fair weather – while remote workers can also earn in dollars or pounds.… pic.twitter.com/pdNgHAgmRO
— BitKE (@BitcoinKE) October 24, 2023
The national debt in South Africa reached R143 billion ($7.54 billion) at the end of July 2023, surpassing the R115.5 billion ($22.73 billion) forecast made by economists.
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