The best experts sang the alarm about a potential debt crisisGoldman Sachs said.
The Bank made a positive confiscation of the three economy about the worldview for the financial condition of the United States.
The best ideas from Ray Dalio, Ken Rogoff and Niall Ferguson provide details below.
The investor refers to a swelling public debt The load was calmed down last week. However, some experts say the United States is not just outside the forest.
Goldman Sachs spoke of three best economic experts – Ray Galio, Ken Rogoffand Niall ferguson – About to rise debt level In the US. Said they were worried about a concern that all three debt crisisIn particular, while President Donald Trump’s influence GOP Tax and Spend InvoiceThe following ten years are estimated that the trillions of budget deficit were added.
It reflects a little more pessimistic view than the market. After the scary last month, it was strong demand for long-dated government bonds this week. This was a sign that investors feel more comfortable than the financial situation in the United States, after the last month showed the nerves Moody has lowered US debt and Trump’s tax fee Began to find the way through Congress.
Here’s the best points you need to do with each of the experts:
Ray GalioJemal Contyess / Getty Pictures for Time
The billionaire hedging fund manager said he saw three factors that determined the worldview for the US debt.
How much does the government pay for debt interest compared to income. Mood Interest payments Rising, “Unacceptable” may prevent government from spending money on other things.
How much government does the government need to borrow relative to demand. If the government needs to sell more treasury than those who are ready to buy, Interest rates will have to rise. This provides investors a more attractive product to capture the US debt, but high prices also damage the markets and the economy.
How much money does the Central Bank need to print in the other to get the rest of the debt. If the demand for US treasures is particularly weak, the Fed can step up to the purchase of bonds to ensure the financing of the government. If it should be Print more money To do this, it can ding inflation and value US $.
“This can easily measure these bad signs of deterioration and move towards the approaching debt crisis,” Dalio warned for a long time debt Dynamics Ussaid. “Such a crisis occurs when the contraction of debt-funded expenses occur as a reduced economic heart attack.”
Dalio to prevent a crisis said he believed in the government’s reduction Budget deficit Up to 3% of GDP. Reducing debt can cause 150 main points of interest rates, evaluated, reduced interest payments that stimulate national debt and economy.
Kenneth RogoffFaruk Loans / World Economic Forum
Current Trump’s current agendaRogoff thinks that the United States will enter the debt crisis for the next four or five years. This is faster than five- seven years of graphics predicted before Trump’s re-election.
“The concept of a free lunch that is pushing by the debt by many economists is absurd,” said Rogoff. “The larger cut on top of today’s high debt is set for a crisis that requires an important adjustment.”
Rogoff thinks that the debt crisis can play in two ways:
Inflation Outcomes in a spit and economic shock. “It is difficult to look clear that the shock will appear, but it is likely that only relatively small adjustments in the bond markets will be more painful than inflation shock,” he said.
Government can manage debt By maintaining interest rates to artificially low and restricting capital flows. However, these measures will harm economic growth and actually provide services to the apostles in the economy.
Investors have been concerned about the US debt for a long time, but because of the long-term interest rates, long-term interest rates, because in the last ten years, it is long concerned.
“People must recognize that Higher interest rates It can prove the desired thought here and to return to the lower ratio of the past, “he said.
Niall fergusonDavid Levenson / Getty Images
Ferguson thinks of a crisis by a military call and the United States lost its position as a global force, and the debt is deepening.
The British-American financial historian, a country, a country has determined how much it is to pay more interest for its debt to pay interest to interest.
This rule, which is called “Ferguson’s Law”, now belongs to the United States spending $ 1 trillion on interest payments on national debt payments for 2024 fiscal payments. Treasury Department. This year was more than $ 883.7 billion in this year Defense costs.
Approximately every people who violate Ferguson’s laws have lost their status as “great power” in financial markets.
“Any great power that is in a hurry Financial policy He said “Ferguson” by allowing the cost of the price of the debt price exceeds the value of the price. “The United States said. The United States is the latest great power to find yourself in the financial jam.”
In the United States, this was able to borrow as much as he had no problem, in part US $ The world’s reserve currency and investors are still due to the treasures’riskless“Ferguson said:” He believed in the ability to do good for US interest payments.
