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 9.10% 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.
Priority Gold is an industry leader in precious metals, offering physical delivery of gold and silver. Plus, they have an A+ rating from the Better Business Bureau and a 5-star rating from Trust Link.
If you’d like to convert an existing IRA into a gold IRA, Priority Gold offers 100% free rollover, as well as free shipping, and free storage for up to five years. Qualifying purchases will also receive up to $10,000 in free silver.
To learn more about how Priority Gold can help you reduce inflation’s impact on your nest egg, download their free 2025 gold investor bundle.
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