Ray Dalio’s Urgent Debt Warning: Is the U.S. at a Financial Inflection Point?

Welcome to the One of a Kind Financial Show Daily. I am Mike Milligan. It's Monday, August 24th, and I'd like to start today's show off by saying thank you to the 18 new subscribers that hit our YouTube channel last week. David, Kevin, Kyle, you guys rock. Uh, also the new ones that I do not know, thank you for joining today. Uh, it's 35 days until I turn 50 years old. You know, I'm just 5 touchdowns away from 50. Personally, I want to drink a gallon of water today, get 10,000 steps. New week, same discipline. Last week we studied 5 voices: Michael Burry, Robert Kiyosaki, Jim Cramer, Michael Saylor, and the CEO of Accenture, Mrs. Sweet. Now here is the announcement. This week I'm gonna do 5 more, 5 more well-known voices in finance, each with a real track record, each with real business model behind the microphone, each worth learning from, and each worth balancing against a written financial plan. We're gonna start today with one of the most, uh, with one person that we would put on Mount Rushmore of macro investors. His name's Ray Dalio. Educate first. Then I'm going to talk about his newest call from a CNBC interview on Friday. My mission is to educate, coach, plan, and my motto is to never miss a moment. Let's go.

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On Friday, August 21st, the stock tried to find their footing. The S&P closed at 7,674, up 0.43%. For the day, the Dow Jones Industrial had a huge day, up over 500 points, just short of 1% at 0.98% to close at 53,277. And the NASDAQ closed up 0.43%. But the week was tougher. The S&P 500 finished down 1.4% for the week. NASDAQ was down 2%, and the Dow was down 0.9%. Both the S&P and the NASDAQ snapped a 3-week winning streak. Long-dated Treasury yields kept climbing. The 30-year finished at 5.273%, the 10-year at just a hair shy of 4.75% per CNBC, even after the Treasury Department confirmed an expanded buyback program will run from September 9th through November 4th. Guys, Bitcoin though was the standout. Bitcoin traded up on Friday to $75,343 by the close of the stock market. That's, uh, it started the week at $62,837, a weekly gain of roughly 20 to 22%. Gold reached $4,569 per ounce, a 3-month high, up nearly 5% of the week. That's the educational component. Because none of what I just said is a signal to trade. That's the setup for today's guest and what this week will hold for us.

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This week, compounding on last week's faux profiles, is, is I'm gonna, I wanna start this week by talking about Ray Dalio. I'm going to give you 5 different voices this week from 5 different lens with one common exercise, how each of them compares to a written one-of-a-kind financial plan. I'm also going to hit people that in market, in the market terms for 2026 are relevant to what people are hearing. The lesson of last week was held A subscription to someone else's opinion is not a written plan. This week, we're going to go deeper. So who is Ray Dalio? Ray Dalio is 77 years old, a New York native, Harvard Business School graduate. In 1975, out of his 2-bedroom apartment in New York City, he founded Bridgewater Associates. Over the next several decades, Bridgewater grew into the largest hedge fund in the world by assets under management. Best known for its all-weather portfolio and its pure alpha strategy, Dalio built a firm around a written set of principles. Literally, a book called Principles, published in 2017, laid out his management and decision-making framework. He stepped back from day-to-day control of Bridgewater in 2022 and now writes and speaks primarily On macroeconomics, credit cycles, and geopolitics. The reason he gets the microphone this often is not just the returns. It's a framework. Dalio's work, Principles for Navigating Big Debt Crises, Principles for Dealing with the Changing World Order, is a study of long-term debt cycles across empires. That is the lens he applies today when he looks at the United States. So when Dalio warns about debt, he is not pattern matching to a headline. He's pattern matching to a 500-year study. That does not make him right. It does make him worth reading carefully and listening when he speaks up. On Friday, he was interviewed on CNBC. Dalio said Treasury Secretary Scott Bessette's expanded debt buyback plan, the very same plan that moved this week's bond market, is a symptom, not a solution. His words, as reported by CNBC, quote, I am confident that the government's financial condition is at an inflection point, unquote. He then added, quote, If this is not dealt with now, the debt will build up to levels where they can't be managed without great trauma. His timeline said, he said, is that his guess, which I suppose would be a bad one, is that it will come in 3 years, give or take 2, if the course we're on is not changed. 1 year on the early end, 5 years on the late end. 3 years is the central estimate. The numbers he cited, again, per CNBC, the US is spending about 40% more than it brings in. The July budget deficit was more than $432 billion. We talked about that 2 weeks ago on this very show. If the US government were a business, estimated debt service payments would total roughly $11 trillion, about 200% of annual revenue. His target for a sustainable budget deficit is 3% of GDP. His 3-part prescription though, he said the US needs to do 3 things concurrently: reduce government spending, raise tax revenue, and lower interest rates. And he warned, all 3 need to happen concurrently as to prevent any one from being too large. If one is too large, the adjustment will be traumatic. End quote. He specifically cautioned, quote, it would be very bad if the Federal Reserve unnaturally forced interest rates down, unquote. Dalio recommends investors underweight debt assets, meaning bonds, and instead own gold, Bitcoin, in essence, things that protect against credit crunches. He said as much as 10 to 15% of a portfolio could be allocated to gold, and then investors should also hold it in his phrase, a bit of Bitcoin. He did not name a specific Bitcoin percentage. A reminder, this is for educational purposes only, not a framework to go out and make an investment decision today. But here's the planning framework. Take Dalio for what he is, a serious student of long-term debt cycles, giving a serious warning. Do not take Dalio for what he is not, a personal financial planner who has met with you, read your tax return, run your Social Security claiming strategy, or mapped out your calm line of cash. A 10 to 15% gold allocation is a portfolio recipe, not a plan. Your plan starts with what your household actually needs in the form of income to cover the things you want and the things you need. It covers taxes, long-term care, investments that allow you to sleep at night, longevity, beneficiaries, and the moments that make up a one-of-a-kind life. Then and only then do you ask how much of a single macro thesis belongs inside. Only then can you go to Dalio's thought process and say, this is how we structure or how we add tools in our one-of-a-kind financial plan. Folks, we're not chasing returns. We're just building a one-of-a-kind financial plan that serves you, where your money has a purpose and your life has a vision. Never miss a moment, folks.

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For more information, one, if you are a client of One Oak Financial, reach out to us. We can talk more about how these macro themes that we we study apply into the portfolios we put in place. If you're not and you just want to connect with us, you could text the word IDEAS, I-D-E-A-S, to the number 600-700 or call our office directly. It's 757-909-7151. I'd also invite you, if you did not listen to this weekend's radio show of the One of a Kind Financial Show with me and Gary, go visit it, www.oneofakind.com. Oakradio.com. That's the number one oakradio.com. And remember, you're unique. You're one of a kind. And here on the One of a Kind Financial Show Daily, we are learning just as I'm learning Spanish. Estoy aprendiendo. You are here to learn about what's happening in the market and those that impact it. Educate, coach, plan. My mission. Never miss a moment's my motto. I'll see you tomorrow. Where we'll start looking at a counter to Ray Dalio and Cathie Wood. The One of a Kind Financial Show is for educational purposes only. Nothing on the show is investment, tax, legal, or accounting advice, and nothing here is a recommendation to buy or sell any security, index, ETF, commodity, cryptocurrency, annuity, or other financial products. References to individuals including Ray Dalio and Treasury Secretary Scott Piscette and to firms such as Bridgewater Associates are for educational and journalistic commentary based on Public reporting, and are not endorsements or criticisms of those individuals or their firms. Market data reflects reported closing value on the date stated. It can change. Bitcoin and other cryptocurrency prices are highly volatile. Gold prices fluctuate. Past performance is not a guarantee of future results. Any strategy discussed may not be appropriate for your situation. Consult your certified financial planning professional, certified. Public accountant or attorney before acting on anything you hear. I am a certified financial planning professional, the founder of One Oak Financial, and this has been the One of a Kind Financial Show Daily.

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