“Billionaire Ray Dalio expresses concern over global impact of US banking crisis”

In a recent interview with Chris Williamson on YouTube, billionaire Ray Dalio expressed concern that the crisis in the US banking industry has caused other countries to stop buying government debt.

Dalio believes the Federal Reserve is responsible for a much larger problem, of which the collapse of Silicon Valley Bank is a symptom.

In the past year, interest rates have risen to historic levels, which has led to a depreciation of bonds that were sold to banks, companies and other countries a few years ago. As a result, bond prices fell significantly and the prices of newer, higher yielding bonds rose.

The Federal Reserve’s tight monetary policy has created a disastrous environment for the US, prompting other countries and buyers to back away from US bonds just when the government needs more money to finance its government deficit.

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According to Dalio, this phenomenon is happening worldwide, affecting banks, insurance companies and other institutions.

He pointed out that the same is happening in Europe and with Japanese companies that have bought dollar bonds.

Although putting the bonds on the market would spell disaster, Dalio believes buyers are no longer interested in buying them, creating less demand for the debt the government must sell to pay the deficit.