Ray Dalio, founder of Bridgewater Associates, warns that the US financial situation presents serious issues.
In a new interview with CNBC, billionaires compare the US economy with a circular system, which brings credit to people, and people have to turn it into profits.
However, when credit is not being used productively, Dalio points out that debts are simply increasing, slowing the economy, as well as hurting the bond market.
Responding to the question of whether America is “broken” or not, Dario suggests that the amount of debt the US has creates an imbalance between supply and demand for bonds.
“If you have this massive cardiovascular system that brings credit to people and you use that credit well, think of a circular system where they generate profits and profits pay for it, so if your debt is rising compared to your income, that's the problem.
The second unit is buying and selling. In other words, one man's debt is another man's assets. They hold these bonds. There are many people all over the world who have these bonds…
Then they take those bonds and now they have to buy a lot of other bonds because we sell them. If you actually calculate those who are those buyers, then not only are there issues of supply and demand, but you can also reduce the demand on supply and sell those bonds when they enter a position where they have to worry about those bonds, so the amount sold will be much larger than the amount of new debt being produced. So the second factor is supply and demand, and the third is when that supply and demand arises, and the interest rates rise or when the central bank comes in and prints the money.
So, if you look at these numbers… you can see that the US location and the problem will be revealed. ”
https://www.youtube.com/watch?v=zkwjl95miyu
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