Ray Dalio issues dire warning, says America’s debt woes are spiralling, predicts shocking developments on the horizon

Bridgewater Associates founder Ray Dalio warned of an emerging crisis in US debt, predicting that the nation's debt crisis could soon disrupt the global economy, CNBC reported.

Dangerous Supply-Demand Imbalance in US Debt

Billionaire hedge fund manager Dalio claimed that the United States has a serious supply-and-demand issue in terms of selling its debt, according to the report.

During CNBC's 'CONVERGE LIVE' conference in Singapore, Dalio said that the US government must sell an unsustainable level of debt to finance its activities, but there is a serious danger that there will be no buyers among international investors, as per the report.

Growing Urgency of the Debt Crisis

The current national debt stands at $36.2 trillion, and the US deficit is projected to be 7.2% of the country’s GDP, a figure Dalio believes must be cut down to 3% for the situation to stabilize, CNBC reported.

According to him, the debt issue is imminent and of "paramount importance," CNBC reported. He also mentioned that, “You are going to see shocking developments in terms of how that’s going to be dealt with,” as quoted in the report.

Drastic Measures Could Be on the Table

Dalio floated the possibility of the US government being compelled to contemplate drastic measures to address its debt crisis, such as restructuring its debt or pressurizing foreign nations to purchase more US debt, CNBC reported. He even went so far as to propose that the US might even stop paying some creditor nations, according to the report.

Tariffs Could Lead Countries to Fight

His remarks come at a time when there is increasing uncertainty in the world economy, as trade tensions continue to rise, particularly between the US, China, Mexico, and Canada.

Dalio warned that tariffs are going to cause fighting between countries, but also mentioned that he was not necessarily talking about a military confrontation, CNBC reported.

He claimed, "There will be fighting, and that will have consequences, and I think that’s the main thing to pay attention to,” as quoted by CNBC.

FAQs

What is Ray Dalio's warning about US debt?
Ray Dalio has cautioned that the US is confronted with a severe debt crisis. According to him, the government is also having a serious supply-and-demand imbalance in selling its debt, which may derail the world economy.

How large is the current US national debt?
As of now, the US national debt stands at over $36.2 trillion.