Ray Dalio Believes US Entering Debt Crisis

The billionaire Ray Dalio said that the US is about to enter a debt crisis. Check out the latest reports about this below.

Billionaire investor Ray Dalio said that the US is already in the latter stages of a debt crisis and predicts that the government will find it difficult to seek enough buyers for newly issued bonds.

In a new Bloomberg interview, he made sure to explain the fact that the reason why there could be a shortage of US debt buyers stems from the fact that institutional investors who bought treasuries a few years ago got burned by the Fed’s rapid interest rate hikes.

“When interest rates rise, the value of older bonds that offer lower yields declines as the government issues new bonds that pay higher interest,” the online publication the Daily Hodl notes.

Dalio also mentioned the fact that some countries are afraid to accumulate the country’s debt after seeing how the US and its allies froze about $300 billion worth of Russian assets since the onset of the war in Ukraine.

“We are at the beginning of a very classic late big-cycle debt crisis when the supply-demand gap – when you’re producing too much debt and you have also a shortage of buyers.”

He continued and said the following:

“What’s happening now is we have to sell all of this debt, [but] do you have enough buyers? There are changes now in terms of the quantities that are being held by large investors around the world that have lost money in these treasury bonds and so on.”

Dalio also said that there are geopolitical changes, which are having an effect. “Some countries are worried about sanctions, and then there’s this geopolitical shift.” Check out the original article posted by the Daily Hodl in order to learn more details.