PANews, October 14 news: Bridgewater founder Dalio wrote that the United States is entering a new phase in which expanding bond supply pushes up yields, a trend that will directly drive up borrowing costs and further inflate the scale of government debt.
Dalio predicts that unless high interest rates cause enough damage to the real economy and financial markets to prompt the supply and demand of funds to rebalance, this vicious debt spiral will be difficult to stop. As a long-time warner of the U.S. debt crisis, Dalio has advised investors to sell bonds and buy gold and Bitcoin.
This month, the U.S. 10-year Treasury yield once surged to its highest level in nearly 25 years, approaching the 5.4% mark. After yields hit a cyclical high, some investors and strategists, including BlackRock and Morgan Stanley Investment Management, have turned bullish on U.S. Treasuries, believing that current high yields offer allocation value.