Ray Dalio warns of US debt crisis and waning global dominance

Investor Ray Dalio says the United States is entering a "perfect storm" driven by massive government debt, internal political division and a shifting global order. He predicts debt will outpace income, forcing higher taxes, inflation or benefit cuts, and warns that the dollar will lose some of its absolute dominance as countries such as China, India and Middle‑East nations increase trade in their own currencies.

Dalio also sees U.S. financial markets remaining strong but becoming far more volatile, likening the current AI surge to the dot‑com bubble and noting a widening gap between the financially strong and weak. He cautions that the United States can no longer sustain a strategy of military confinement of China, citing overstretched commitments in the Middle East and strategic vulnerabilities like the Strait of Hormuz.

To navigate the coming turbulence, Dalio advises diversification, holding hard assets such as gold and real estate, rapid skill upgrades and positioning oneself in growth‑oriented environments.