Ray Dalio Warns Borrowings Will Surge If Incomes Fail To Keep Up With Debt Growth
Synopsis
The Bridgewater Associates founder warned that slower income growth would force borrowers to borrow money not just to spend, but also to service existing debt.
Bridgewater Associates founder Ray Dalio on Friday warned that if income growth fails to keep up with that of debt, the economy could find itself in a circular trap that goes from high to “unsustainably high debt.”
“If incomes fail to grow as quickly as debt and debt service, the ratio of debts to incomes will mechanically grow, which will require increased borrowing to service debt as well as to spend,” Dalio explained, in a post on X.
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