Ray Dalio Warns of a Coming U.S. Debt Spiral — And This Time, Wall Street Is Listening

EDITOR'S NOTES

Ray Dalio has now joined the growing list of financial heavyweights voicing grave concerns about America’s debt trajectory — and not a moment too soon. In this piece, I break down the key revelations from Dalio’s latest book and why his stark warnings should matter to anyone still trusting the U.S. government to safeguard their savings. Spoiler alert: It won’t. With interest rates rising, debt ballooning, and bipartisan dysfunction accelerating, the economic reckoning we’ve long warned about is accelerating. If you’re not already prepared, now is the time.

Eric Blair Jun 4, 25

Dalio Sounds the Alarm — And He’s Not Alone

Ray Dalio didn’t build the world’s largest hedge fund by ignoring historical patterns. And in his new book, How Countries Go Broke: The Big Cycle, he’s not mincing words. The U.S. economy, he warns, is lurching toward a “debt death spiral” — the kind of fiscal collapse that has spelled doom for empires throughout history.

According to Dalio, the short-term risk of a debt crisis remains “very low.” But the long-term threat? “Very high.” That’s economist-speak for tick, tick, boom. The U.S. is borrowing at a pace the market can no longer digest. And when confidence breaks — as it inevitably will — the cost of borrowing could skyrocket, triggering a self-reinforcing loop of debt, higher interest rates, and fiscal paralysis.

Wall Street’s Wake-Up Call

Sound familiar? It should. We've been screaming this from the rooftops for years. But now Wall Street’s golden boys are starting to panic too — not because the fundamentals changed, but because they’re finally feeling the heat. In May, the 30-year Treasury yield hit its highest level since 2023. That’s investors demanding hazard pay just to hold Uncle Sam’s IOUs.

The so-called “Trump tax cuts” — loved by the markets but paid for with future debt — have accelerated this problem. Tax revenue has been gutted, spending continues unchecked, and the federal debt-to-GDP ratio has soared from 104% in 2017 to a stunning 123% in 2024. The Treasury is now throwing bonds at a market that’s starting to throw them back. Dalio describes this as a “classic death spiral” — rising interest rates leading to falling demand, requiring even higher rates, and so on until the entire edifice collapses.

When the Unthinkable Happens Suddenly

And here's the part no one in D.C. wants to say out loud: once you're in the spiral, it’s too late for soft landings. As Dalio put it, “The change is unthinkable — and then it happens suddenly.”

If you think your bank account, pension, or retirement fund is safe inside this debt-ridden system, think again. Dalio’s not alone. Jamie Dimon, JPMorgan Chase’s CEO, echoed the fear last week, saying a “crack” in the bond market is imminent. Barclays analysts agree. Even Alan Auerbach of UC Berkeley warns that this level of debt is “unprecedented,” rivaling only the worst recessionary periods in history.

Washington’s Paralysis: A Boat Headed for the Rocks

What’s Washington doing about it? Absolutely nothing. Dalio compared it to “a boat headed for the rocks,” with both parties agreeing it needs to turn but unable to decide how. That’s not leadership — it’s dereliction of duty.

You can’t afford to wait for Congress to “figure it out.” You need to take control of your wealth now — before the spiral tightens and your assets are trapped inside a collapsing system.

How You Can Prepare — Before It’s Too Late

Here’s how you start:

Download Bill Brocius’ free guide: 7 Steps to Protect Your Account from Bank Failure
Buy Bill’s game-changing book: End of Banking As You Know It
Join the Inner Circle Newsletter for just $19.95/month and gain exclusive access to Bill’s latest insights before the crisis hits full stride.

We are past the phase of polite warnings. The numbers don’t lie. And neither does history.

The debt spiral is tightening — and it’s every man for himself.