US Debt Supply-Demand Imbalance Risks Triggering Global Economic Turmoil

Bridgewater Associates founder and billionaire Ray Dalio warned on Wednesday (March 12) that the US is facing a serious debt supply-demand problem that could have far-reaching global economic consequences. He believes the amount of US government debt that needs to be sold far exceeds market demand, and this imbalance will lead to a series of "shocking" fiscal changes.

This is not the first time Dalio has warned about the US's ever-increasing debt levels. Currently, the total US debt exceeds $36.2 TRON, and the government's fiscal deficit has reached 7.2% of GDP, far above a healthy level. Dalio bluntly stated that the US fiscal deficit must be compressed to 3% of GDP, or the global markets may witness an unprecedented turmoil.

Debt Pressure Looms, US May Take Extreme Measures

At the CONVERGE LIVE event in Singapore, Dalio told CNBC reporter Sara Eisen that this debt crisis is not distant, but imminent and critical. He said: "The US must sell a large amount of debt, but the market is unwilling to buy, this is a serious supply-demand problem."

When asked if the US might enter fiscal austerity due to debt issues, Dalio proposed three possible response measures:

1. Debt Restructuring - The US may renegotiate or modify some debt terms to ease repayment pressure.
2. Pressuring Other Countries - The US may use diplomatic or economic means to force other countries to purchase US debt.
3. Cutting Payments to Some Creditors - In extreme cases, the US may even choose to suspend or reduce debt payments to certain countries.

He added: "Just as we are witnessing political and geopolitical transformations, many things that seem unimaginable to most people will be witnessed, as history repeats itself, and we will see some shocking developments."

Trade War Risks Escalate, Dalio: Tariffs Will Exacerbate International Conflicts

In addition to debt issues, Dalio also expressed concerns about the uncertainty surrounding global trade policies. He pointed out that the market is experiencing a "tariff roller coaster," with US trade policies causing a series of market fluctuations and heightening unease on Wall Street.

In recent years, the US government has pushed an "America First" economic strategy, imposing tariffs on major trading partners such as Canada, Mexico, and CHINA, in an attempt to reshape the global economic order. However, Dalio warned that this approach is likely to lead to escalating international conflicts. He compared the current situation to Germany in the 1930s, saying that the country then addressed its economic difficulties through debt reduction, tariff increases, and domestic market development.

He analyzed: "Countries are starting to become more nationalist, protectionist, and even militaristic, and this is the pattern of historical development."

Dalio emphasized that the risks of the tariff war extend beyond the economic realm, and may also lead to international tensions and conflicts. He pointed out: "When countries like the US, Canada, Mexico, and CHINA enter into tariff disputes, this will trigger conflicts, not necessarily military confrontation, but the consequences cannot be ignored."

Dalio: I Am a Neutral Observer Without Any Political Stance

Faced with these major economic and trade challenges, Dalio said he is only analyzing global trends from a neutral standpoint, comparing his role to that of a mechanic or doctor, focusing on diagnosis and explanation rather than political intentions. "I am not an ideologue, I just make observations and suggestions based on history and data," he said.

This conversation took place when Dalio shared the stage with Salesforce CEO Marc Benioff, and the two discussed the future direction of the global markets. As the US debt problem continues to worsen and the uncertainty of trade policies intensifies, market investors will undoubtedly need to be more cautious in navigating this potential financial storm.