""My grandchildren and great grandchildren not yet born, are going to be paying off this debt in devalued dollars.""
""It's always done when countries essentially go broke," Dalio said. "They print money, devalue the currency, and create an artificially low interest rate, so that the person who's holding the bonds is receiving an artificially low interest rate.""
""The world used to have gold as money," he said. "That was the way." (He repeated his regular advice it's "prudent" to have between 10% to 15% of your portfolio in gold.)"
The United States faces an unsustainable fiscal trajectory with national debt approaching $38 trillion. Excessive national debt is rarely resolved by spending cuts or hard defaults; governments typically devalue the currency and expand money supply. Currency devaluation and money printing produce artificially low interest rates, reducing real returns for bondholders and transferring the burden to future generations. The end of the dollar's gold convertibility in 1971 marked a shift to fiat currency and changed price calculations. Gold has regained appeal, and holding 10–15% of a portfolio in gold is viewed as a prudent hedge.
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