Billionaire investor Ray Dalio has warned that the United States may resort to more money printing in the future due to its rapidly accumulating debt. Speaking at the All-In Summit, Dalio expressed concerns regarding the country’s ability to repay its financial obligations as it continues to amass debt.
He suggested that a recession could lead to the reintroduction of quantitative easing, a monetary policy aimed at increasing the supply of currency in the financial system. The rising debt levels in the US result in higher debt service payments relative to incomes, potentially squeezing out consumption and necessitating the printing of money.
The national debt of the United States currently stands at $33.044 trillion, according to the US Treasury Department. Dalio also highlighted the risk that US bondholders might choose to liquidate their holdings if the value of their bonds declines due to money printing.
When the government prints more dollars, the value of the currency decreases, leading to a decrease in the value of US bonds. This scenario could result in reduced demand and attractive returns for bondholders.
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