Ray Dalio says Bessent move is sign that a debt crisis is getting closer; recommends gold and bitcoin

Treasury Secretary Scott Bessent's debt buyback announcement this week fits into a broader pattern that can signal a forthcoming crisis, according to billionaire investor Ray Dalio.

The Bridgewater Associates founder said Bessent's plan to increase government debt purchases may portend trouble for the U.S. economy. Coupled with the Japanese government reducing its U.S. bond market exposure and surging long-dated American bond yields, Dalio said investors may want to prepare their portfolios for increased risk by owning cryptocurrencies and gold.

"I am confident that the government's financial condition is at an inflection point," Dalio wrote in a LinkedIn post published Friday. "If this is not dealt with now, the debts will build up to levels where they can't be managed without great trauma."

U.S. 30-year Treasury yield, 5-day

Dalio noted that the Treasury Department has "only limited capacity" to buy back bonds. Bessent told CNBC on Thursday that his team was going to "make a market" and that the purchases would likely top $4 billion.