Dalio, founder of Bridgewater Associates, pointed to Japan\u2019s experience as a cautionary tale. He noted that Japan\u2019s currency weakened significantly due to extensive money printing, leading to an 80% loss in purchasing power for its citizens. He warns that a similar fate could befall the U.S. if current economic policies continue.<\/p>\n
Dalio predicts that increasing debt servicing costs in the U.S. could restrict consumer spending and widen the gap between fixed debt repayments and actual revenue. This, in turn, could put downward pressure on the U.S. dollar.<\/p>\n
He emphasizes that a significant red flag would be a large-scale sell-off of U.S. bonds by investors. Such a move would likely prompt intervention from the Federal Reserve and other central banks. Dalio believes the most critical period for these issues could arise during the next economic downturn, which he expects within the next four years.<\/p>\n