Overview

• Ray Dalio has raised concerns about the U.S. federal debt surpassing $36 trillion, with a debt-to-GDP ratio now exceeding 122%.
• Dalio warns that the U.S. faces a supply-demand imbalance, as global buyers may be unwilling to absorb the increasing debt issuance.
• He advocates reducing the federal deficit from its projected 7.2% of GDP to 3% to stabilize the financial system and avoid economic shocks.
• Dalio outlines potential solutions, including debt restructuring, political pressure on foreign buyers, or cutting payments to certain creditor nations.
• Experts echo Dalio's concerns, noting that rising interest payments and diminishing foreign interest in U.S. debt could lead to unsustainable borrowing conditions.