Ray Dalio issues dire warning of American ‘debt death spiral’ and highlights serious US dollar risks — but points to this 1 shockproof asset for ‘when bad times come.’ Do you own any?

Debt and the risk of inflation

When a borrower carries an overwhelming amount of debt, lenders begin to worry about repayment, increasing the risk of default. But according to Dalio, the U.S. is unlikely to default. The bigger threat? Depreciation of our currency.

“There won't be a default — the central bank will come in, and we'll print the money and buy it,” he says. “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. The cost of essentials like food and housing remains stubbornly high.

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Dalio’s safe-haven pick for ‘bad times’

To recession-proof your investments, Dalio emphasized the power of diversification and the role of one time-tested asset.

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

Gold is considered a go-to safe haven. It can’t be printed out of thin air 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, driving up its value.

So, how much of the precious metal should an investor own? Dalio advises that investors hold 10 to 15% of their portfolios in gold.

These days, you don’t even have to go to a bullion shop to buy precious metals. There are plenty of online platforms that offer a wide selection of gold and silver bars and coins and fair pricing.

Additionally, you can combine the recession-resistant nature of gold with the tax benefits of an IRA by opening a gold IRA.

If you’d like to convert an existing IRA into a gold IRA, companies typically offer 100% free rollover. Others might offer free gold, silver or other metals up to a certain amount when you make a qualifying purchase.

You can check out our top picks for industry-leading companies offering gold IRAs.

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