Dalio: U.S. debt is climbing, and the monetary order is facing risks

Ray Dalio said that the United States is unable to reduce out-of-control spending, which is accumulating debt and putting the monetary order at risk. Dalio made the remarks on Friday during a panel discussion at the "Future China Global Forum" in Singapore, saying, "We are witnessing the threat to the monetary order, where all factors combined will determine whether we are witnessing the end of the entire American empire." The founder of Bridgewater Associates has long warned that the spiral of debt could lead to unsustainable risks. He has pointed out that politicians from both parties in the United States are unwilling to address the increasingly severe fiscal challenges. Dalio said during the panel discussion that the United States "cannot reduce spending for various reasons." He mentioned that the U.S. is projected to spend $7 trillion this year, while only bringing in $5 trillion in revenue. Taking into account interest payments and the extension of maturing debts, "this means having to issue $12 trillion in debt," although he did not specify a time frame. He pointed out, "The global market demand for this type of debt is not so strong, which will create an imbalance in supply and demand." He attributed the uncontrolled borrowing to "human nature." Dalio's fellow panelist, Huang Guosong, founding partner of Avanda Investment Management, said that deficits and other issues are putting the strong position and hegemony of the U.S. dollar at risk. In response, Dalio mentioned that actions are being taken by the Trump administration officials, including Treasury Secretary Steven Mnuchin, to address the issue, but he was not clear on the specifics. He said, "After discussions with Secretary Mnuchin and government officials, I have found that they have a much deeper understanding of these issues than before and a much stronger willingness to proactively address them." Huang Guosong said that similar problems are also faced by the UK, France, and China. "The United States has reached a critical point, and we do not know when the crisis will erupt." Dalio stated that all fiat currencies will struggle to maintain their function as stores of wealth. "We are seeing non-fiat currencies becoming means of storing wealth," including gold and cryptocurrencies, he said.