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Hedge fund billionaire Ray Dalio has a stark warning for America — one that centers on its mounting debt crisis. And with national debt standing at a record-high $38.86 trillion as of March 4, 2026 (1), it might be a good idea to listen.
In an interview with CNBC in early 2025, Dalio was already painting a grim picture of the nation’s financial trajectory, saying it was on course to fall into “a debt death spiral (2).”
“A debt death spiral is that part of the cycle when the debtor needs to borrow money in order to pay debt service, and it accelerates,” he cautioned. “And then everybody sees that, and they don’t want to hold the debt.”
Highlighting the dire situation, he noted that the U.S. federal government now spends almost $1 trillion a year in interest payments to service the national debt.
In fact, a report from Fortune related that the U.S. Department of the Treasury was already paying out $11 billion per week in the fiscal year 2026 to service the nation’s debts, representing 15% of federal spending for the year (3).
To make matters worse, the country continues to run deficits, spending more than it receives. The Treasury reports that the federal government ran a $1.78 trillion deficit in fiscal year 2025, when it spent $7.01 trillion but only took in $5.23 trillion in revenue.
As for 2026, the news is also looking grim: The Congressional Budget Office (CBO) projects that the federal budget deficit will reach $1.9 trillion by the end of 2026 (4). The war with Iran is also a major consideration, as it could impact both inflation and global debt holdings.
So, is Dalio right to worry? Here’s a closer look at his “debt death spiral” and the one asset he thinks will keep you safe.
A debt tailspin isn’t just bad for the debtor. It can also be bad for the lender. When a borrower carries an overwhelming amount of debt, lenders begin to worry about repayment, increasing the risk of default.
However, according to Dalio, the U.S. is unlikely to default. The bigger threat? Depreciation of the dollar.
“There won’t be a default — the central bank will come in, and we’ll print the money and buy it,” he says (2). “And that’s where there’s the depreciation of money.”
Americans are all too familiar with the central bank’s quantitative easing (printing money) during the pandemic — and the resulting loss of purchasing power. Inflation surged to a 40-year high in June 2022, with the consumer price index (CPI) soaring 9.1% year over year (5).
The cost of essentials like food and housing remains stubbornly high.
Adding to these internal pressures, the U.S. war on Iran is expected to compound this negative effect on the economy, not just in the U.S. but across the globe. The Guardian reports that the war is “widely expected to boost inflation across the world,” with a particular rise in the price of oil and gas (6).
CNBC also reports that former Treasury Secretary Janet Yellen believes the conflict might impact U.S. economic growth in addition to the other inflationary pressures. She said it could even hold the Federal Reserve back from cutting rates as a result (7).
“The recent Iran situation puts the Fed even more on hold, more reluctant to cut rates than they were before this happened,” Yellen said Monday. In fact, she predicts inflation could hit at least 3% in 2026, a significant jump above the 2.4% rate from January 2026.
What’s more, this global economic shock has led to fears of increased prices in any goods that require transportation — which is practically everything in today’s global economy.
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To recession-proof your investments, Dalio emphasized the power of diversification and the role of one time-tested asset: gold.
“People don’t have, typically, an adequate amount of gold in their portfolio,” he noted in the CNBC interview (2). “When bad times come, gold is a very effective diversifier.”
Gold is considered a classic go-to safe haven to hedge against inflation. It can’t be printed like fiat money, and because it’s not tied to any single currency or economy, investors flock to it during periods of economic turmoil or geopolitical uncertainty, such as war, driving up its value.
This is certainly the case right now, as gold prices have soared above $5,000 per ounce for the first time in history, thanks in part to current geopolitical tensions (8).
But how much of the precious metal should an investor own to shockproof their portfolios against market shifts? Dalio advises that investors hold 10% to 15% of their portfolios in gold.
There are many ways to invest in gold, but not all of them might be right for you.
One way to invest in gold that could provide significant tax advantages is to open a gold IRA with the help of Priority Gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainty.
To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.
With debt on the rise and the somewhat shaky stock market of 2025, it’s natural that investors are looking for other ways to preserve their wealth for 2026.
One investment to consider for diversifying your portfolio is real estate. And even if you aren’t ready to jump into homeownership (financially or otherwise), there are platforms like Arrived that let you buy stakes in rental properties, earn dividends and skip the responsibilities of property management.
Backed by world-class investors like Jeff Bezos, Arrived’s easy-to-use platform offers SEC-qualified investments such as rental homes and vacation rentals for as little as $100. Their flexible investment options allow both accredited and non-accredited investors to benefit from this inflation-hedging asset class with ease.
Start by browsing vetted properties, then simply select a property and choose the number of shares to buy.
Even better, for a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.
If diversifying into multifamily and industrial rentals appeals to you instead, you could consider investing with Lightstone DIRECT, a new investing platform from the Lightstone Group, one of the largest private real estate companies in the country with over 25,000 multifamily units in its portfolio.
Since they eliminate intermediaries — brokers and crowdfunding middlemen — accredited investors with a minimum investment of $100,000 can gain direct access to institutional-quality multifamily opportunities. This streamlined model can help reduce fees while enhancing transparency and control.
And with Lightstone DIRECT, you invest in single-asset multifamily deals alongside Lightstone — a true partner — as Lightstone puts at least 20% of its own capital into every offering. All of Lightstone’s investment opportunities undergo a rigorous, multi-stage review before being approved by Lightstone’s Principals, including Founder David Lichtenstein.
How it works is simple: Just sign up with your email, and you can schedule a call with a capital formation expert to assess your investment opportunities. From here, all you have to do is verify your details to begin investing.
Founded in 1986, Lightstone has a proven track record of delivering strong risk-adjusted returns across market cycles with a 27.6% historical net IRR and 2.54x historical net equity multiple on realized investments since 2004. All told, Lightstone has $12 billion in assets under management — including in industrial and commercial real estate.
As such, even if multifamily rentals don’t appeal to you, Lightstone could still serve you well as an investment vehicle for other real estate verticals.
Get started today with Lightstone DIRECT and invest alongside experienced professionals with skin in the game.
But if gold and real estate don’t fit your portfolio, you could instead consider the dark horse of alternative assets — something that has a low correlation with U.S. markets and global recognition, not to mention sporting some resilience against inflation. It’s also beloved by billionaires and the ultra-rich, but until recently was locked behind a network of brokers, dealers, appraisers and experts.
The asset in question? Art.
Now, Masterworks is helping both non-accredited and accredited investors purchase fractional shares of artwork by iconic artists like Banksy, Picasso and Basquiat. These pieces are referred to as “blue-chip” art, meaning that they’re expected to appreciate in value the same way as blue-chip stocks.
What’s more, Masterworks has sold 25 artworks so far, yielding net annualized returns like 14.6%, 17.6% and 17.8%.
Moneywise readers can get priority access to diversify with art: Skip the waitlist here
Note that Past performance is not indicative of future returns. Investing involves risk. See important Regulation A disclosures at Masterworks.com/cd.
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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
U.S. Congress Joint Economic Committee (1); @CNBCInternationalLive (2); Fortune (3); Congressional Budget Office (4); Federal Reserve Bank of St. Louis (5); The Guardian (6); CNBC (7); The New York Times (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
