Ray Dalio's Warning: "America Won't Survive This Economic Crisis"

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미국 국가부채(약 34조 달러)가 감당 가능한 수준을 넘어서며 공급·수요 불균형으로 부채 위기 초기 단계에 진입했다고 경고. 이자비용 급증(10% 금리 시 예산의 55%)과 양당 분열 등 정치적 리스크를 언급. 과거 2차대전 후처럼 경제성장으로 부채비율을 낮추는 길은 있으나 시간이 말해줄 것이라는 입장. 자산별 1~3개월 가격 예측 발언은 없음.

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01. are we in a debt crisis or are we headed for one um we are at the in my opinion we are at the beginning billionaire investor Ray Dao is warning about a $34 trillion debt fueled tsunami that is about to strike the US economy with each passing second the storm grows larger and larger making it even more painful when it finally hits listen to Dao explain um we are at the in my opinion we are at the beginning of a very classic late cycle late big cycle debt crisis when the supply demand Gap when you're producing too too much debt and you have also a shortage of buyers what's happening now as we have to sell all this uh debt is we then have do have enough buyers there are changes now in terms of the quantities in the world that are being held by um large investors around the world that have lost money in these treasury bonds and so on and then there are geopolitical changes which are having an effect some cases some countries are worried about sanctions and then there's this geopolitical shift so when I look at the supply demand issue there's a supply demand issue for that debt there's a lot of debt it has to be bought has to have a high enough interest rate so a crisis that's you know if we continue down this path in terms of what what's likely over the next you know five and 10 years then you what you reach the point that that Balancing Act becomes very difficult how will we know and is it really a function of not having enough buyers for the federal debt is there any evidence of that so far um we we're right at the brink of starting to find out that the amount of selling of government debt um collapsed right we didn't issue government debt um and now we're going to issue a lot of government debt with each passing second the US national debt grows adding fuel to the potential debt crisis however until recently this hasn't mattered much but according to Ray Dao things are now finally starting to change and here's why for the better part of the last 100 years US government bonds have been considered by many to be the safest investment in the world the US economy is absolutely massive and is home to many of the largest companies on the planet this Dynamic provided protection in the eyes of investors the thought was that if you lent money to the US Government you didn't have to worry about whether or not you were going to get paid back as the taxing authority of the world's largest economy if the US government ever ran into trouble it could simply raise taxes and use that money to pay back borrowers because of this US government bonds have been viewed by investors in the finance Community as the only truly risk-free investment that exists this commonly accepted belief has led to US government bonds being extremely popular Investments for everyone from Individual investors to Pension funds to Banks and even other countries the supply of investor money wanting to purchase government bonds has consistently exceeded how much money the government has needed to borrow as a result borrowing money has always been relatively cheap for the US government however that Dynamic May finally be starting to change the Ripple effects of which would be felt throughout the world let me explain the cost for the US government to borrow money is determined by the laws of supply and demand this concept can be easily explained with this graph here on this line we have the supply of money willing and able to be lent to the US government think of this as the amount of money individuals corporations and countries are willing to let the US government borrow the willingness of investors to lend money to the government can change due to everything from the health of the economy to geopolitical issues and everything in between this line here represents the demand from the US government to borrow money think of this as the amount of money the government needs to borrow to pay its obligations the point at which our two lines cross represents the cost for the US government to borrow money just like other loans this is expressed in an interest rate so the higher the interest rate the more expensive it is to borrow money on the other hand the lower the interest rate the cheaper it is to borrow money as the borrower will be paying less in interest on that loan as Deo explained the US is heading towards a Tipping Point the national debt has grown so large that there is a real possibility that there is more government debt outstanding than money available from investors to buy it if this turns out to be true the consequences will likely be D higher here's how going back to our supply and demand graph let's shift our demand lineup and see what happens moving our demand lineup represents the US government needing more money to cover its ever growing debt notice how now the two lines cross at a higher interest rate if Government debt grows while the supply of money available from investors Remains the Same the US government will be forced to pay a higher interest rate to borrow money let's push our demand line even further up as you can see the two lines now cross at an even higher interest rate higher borrowing cost for the US government would be extremely painful for the country and its citizens given the massive amount of national debt the country has Here's a thought experiment to demonstrate what I mean as mentioned earlier the US national debt is roughly $34 trillion if we assume a 2% annual interest rate on that debt that means the US government has to pay $680 billion in interest each and every year just to stay current on its debt for reference in 2023 the US government had an annual budget of 6.13 trillion to cover all of its spending for the Year this spending includes things such as social programs Education Health Care the military the list goes on and on but you get the point in our example here the $680 billion annual interest rate on the national debt makes up roughly 11% of the entire annual budget that means that 11% of the annual budget is spent not on providing services and resources to Citizens but instead just paying interest on debt the country incurred in the past you are able to see how this can create create what is referred to by Dao as a debt spiral let's see what happens when interest rates increase let's take the interest rate on the debt up to 6% that annual interest expense jumps up to roughly $2 trillion now the annual interest expense on the national debt makes up 33% of the entire National budget let's take things up even one step further and bump the interest rate up to 10% that annual interest expense skyrockets all the way to a whopping 3.4 trillion this annual interest expense would take up a staggering 55% of the entire Federal government's current annual budget you can see now why Dao is referring to this as a crisis while this is of course just an example but according to Dao it is a likely outcome unless some significant changes are made however Deo doesn't seem too optimistic about what's to come listen to him explain given the challenges that we Face uh fiscal challenges that you describe uh we need a political process that will help us get out of it do we have that as goes to the second issue that you always deal with which is internal conflict well the the things that you see happen over and over again when you look at history is when you have a financial not good situation at the same time as you have large wealth gaps you start to see the emergence of populism and we see extremism in both of the political parties okay we see that split a populace is an individual or leader or a political person who will win at all cost that the rules of the game don't as much matter and so we're in a uh the the January 6th type of incident and so on is very interesting the political system in terms of primaries and and the parties tends to create that sort of polarity I think that um I think it's very clear that there is only one good outcome if we can and that's a strong bipartisan because either of the extremes is not going to be able to be dominant you're um the small right this um or or even the small left and um and as a result we're seeing a fragmentation geographically you're seeing people move to different areas not just because of taxes but of differences in values and so on um and so you're seeing this separation I think over the next um two years um the real question is can we maintain can we have a strong bipartisan middle or are we going to have that kind of fragmentation be we have two thing three things aligning that are concerning uh on this uh short-term debt cycle I call it you know the seven-year cycle we're about halfway through in other words interest rates are now at a level that they're probably going to stay at but they're probably not going to rise much from here and there's tightness and the consequences of that are going to be a weaker economy going forward doesn't have to be a big big downturn because of the household sector but it is a balance sheet kind of um recession and I think you're going to that's things are going to get worse in the economy there's a financial issue at the same time as you have this internal conflict so I think that that's going to make for um a risky situation as the interest expense required for the US government to service its debt increases the government is left with two basic options first it can cut back spending dramatically reducing expenditures on the military social security health care and education the second option is to significantly raise taxes both of these options would understandably be extremely unpopular with citizens it's estimated that government spending accounts for 37% of the United States economy as measured by GDP a rapid increase in the federal tax rate would leave less money in the hands of individual and businesses to spend while this is of course just an example but while all this may sound alarming there's actually a ray of Hope a way the United States could avoid a debt crisis for this we have to look at history this chart shows the size of the US national debt relative to the size of the economy to find a time when the US faced similar challenges relating to its debt you have to go back to the World War II period of the 1940s as we can see the cost of financing the military pushed the debt up sharply from around 40% of GDP before the war to a peak of nearly 110% of GDP as the war ended the US was able to avoid a complete financial and economic crisis in fact the post-war period was one of the most prosperous times in American history so how exactly was the United States able to dig itself out of this massive hole two words economic growth yes the US government did exhibit remarkable Financial restraint in the post-war period however arguably even more important was that the US econom grew itself out of the problem a country's debt only really becomes a problem when it grows too large relative to the size of the country looking at the United States the current size of its national debt is roughly $34 trillion the size of its economy is 27.6 trillion as of the most recent reading this gives the US a public debt to GDP ratio of a staggering 123% a higher reading than any time in the country's history one option to get this number down would be to sharply reduce national debt as mentioned earlier this would be incredibly painful for the economy so in the end only time will tell how all of this will play out however I do think it's definitely worth paying attention to what Deo has to say given his impressive track record I think it's fair to say he knows a thing or two about what he's talking about