Posted on 03/23/2025 7:51:38 PM PDT by SeekAndFind
Bridgewater founder Ray Dalio on Wednesday warned that a significant supply-demand problem regarding U.S. debt could have a profoundly disruptive impact on the global economy.
It is the latest in a series of stark warnings about America’s mounting debt from the U.S. hedge fund billionaire, with the country’s national debt currently standing at more than $36.2 trillion.
“The first thing is the debt issue, we have a very severe supply-demand problem,” Dalio told CNBC’s Sara Eisen at CONVERGE LIVE in Singapore. ”[The U.S. has] to sell a quantity of debt that the world is not going to want to buy.”
He said this was imminent and of “paramount importance.”
The U.S. deficit needs to go from a projected level of 7.2% of gross domestic product to about 3% of GDP, Dalio said.
“That’s a big deal. You are going to see shocking developments in terms of how that’s going to be dealt with,” he added.
Asked whether the U.S. debt problem could lead to a period of austerity, Dalio said the issue could result in a restructuring of the debt, the U.S. applying pressure on other countries to buy the debt, or even cutting off payments to some creditor countries.
“Just as we are seeing political and geopolitical shifts that seem unimaginable to most people, if you just look at history, you will see these things repeating over and over again,” Dalio said. “We will be surprised by some of the developments that will seem equally shocking as those developments that we have seen.”
His comments, made on the same panel as Salesforce CEO Marc Benioff, come amid a tariff roller coaster ride for markets in recent days.
Trade policy uncertainty has added to a sense of unease on Wall Street...
(Excerpt) Read more at cnbc.com ...
The Dems and RINOs will fight for every dollar. They love debt.
Huh - maybe we should look at cutting the size of federal government and reigning in spending? Maybe Tariffs to fund the US Treasury?
Trump and Musk figured this out months ago and are working to get our national debt down BEFORE it can bankrupt the county and sink the world’s economy.
Musk gave a hint the other day when he said he wanted to save the country from bankruptcy. Since most ‘journalists can’t do math past a high school level - they’ve missed the issue.
Dalio is a fossilized monetarist who doesn’t understand how money works for a country like the United States that issues its own currency. Government debt creates a surplus in the real economy, as every dollar created must be accounted for in either public or private accounts. This is called Modern Monetary Theory, but is really just double-entry bookkeeping. The discount interest paid by the Federal Reserve on dollars held either as currency or as bonds is arbitrary and serves as a brake on inflation. They are obligated by law to create the necessary money to meet the government’s obligations.
Dalio and other gold bugs use the “debt crisis” as a “noble lie” to constrain the government from overspending and creating inflation. His model is applicable to individuals, cities, states, and businesses that don’t issue their own currency. It doesn’t apply to the Bank of Monopoly also known as the Federal Reserve.
“ Since most ‘journalists can’t do math past a high school level - they’ve missed the issue.”
Most journalists choose algebra to be the subject of mockery. They don’t even understand percentages, which should be a middle school mathematics.
What happens when the government decides not to pay the interest on the debt? How long before the government repudiates its debt?
LOL - I see you've known some journalists in your day. I actually knew one (yes ONE) journalist who could do math. So it can happen...kind of a two standard deviations from the mean kind of 'can happen'.
All the more reason Trump should declare a national emergency on the debt and then tell all those federal judges to pound sand.
Agree!
Regards,
Can’t wait until it is revealed our debt is about 10x what it is officially. Then things will really rock and roll!
Hey, no problem. Once the “rich” pay their “fair share,” the deficit will disappear and there will be plenty of money to spread around to everyone!!!
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