Billionaire investor Ray Dalio has flagged growing concerns over the U.S. economic outlook, citing two key factors that could push the country toward a severe financial crisis.

The first factor is the widening gap between government spending and revenue. In an X post on September 7, Dalio noted that the U.S. is now spending roughly 40% more than it collects, a trend that has built up over decades and is beginning to erode consumer purchasing power.

The second factor involves the U.S. debt market itself. In this line, he noted that there is an increasing mismatch between the volume of debt that needs to be sold, the profile of potential buyers, and the likelihood that all the debt can be absorbed by the market.

To this end, Dalio suggested that the combination of these pressures could create conditions for an “economic heart attack,” signaling a period of financial stress if current trends continue.

The warning comes amid broader concerns about rising debt levels, inflationary pressures, and the sustainability of government spending in the United States.

Dalio’s other economic concerns 

Beyond these immediate concerns, Dalio has highlighted other risks facing the U.S. economy. He has previously warned of a potential debt-induced crisis within the next few years if fiscal policies remain unchanged. To mitigate these risks, he recommended reducing the budget deficit to around 3% of GDP.

The Bridgewater Associates founder has also suggested that gold could serve as a protective asset amid rising economic uncertainties, advising investors to allocate 10-15% of a diversified portfolio to the precious metal, which tends to retain or increase value during crises.

In summary, he has urged policymakers to take immediate action to address these challenges and prevent a potential economic catastrophe.

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