Bridgewater Associates' Ray Dalio says US debt can disrupt global economy

On the unfolding tariff war, Dalio said it could lead to fights between countries, though not necessarily military confrontation.

Veteran hedge fund billionaire and Bridgewater Associates founder Ray Dalio has raised a red flag over America's rising national debt burden, which stands at over $36.5 trillion, stating that it could be profoundly disruptive for the global economy.

"The first thing is the debt issue, we have a very severe supply-demand problem,” Ray Dalio said in Singapore during a CNBC conference on March 12, adding, "US has to sell a quantity of debt that the world is not going to want to buy."

Dalio called the supply-demand issue around US debt of 'paramount importance', and said, "You are going to see shocking developments in terms of how that’s going to be dealt with."

On the unfolding tariff war, Dalio said it could lead to fights between countries, though not necessarily military confrontation. In his view, neutral countries such as Singapore will fare well, and the situation can even be beneficial to them.

"Think about the US, Canada, Mexico, China. There will be fighting and that will have consequences, and I think that’s the main thing to pay attention to."

Bridgewater founder pointed out that the world is seeing something similar to what had transpired in Germany in the 1930s, when the country, faced with crippling debt stemming from World War I reparations, had to writedown debt, and hike tariffs to drive revenue.

"There is a change in the world order as rising powers challenge existing, declining powers. So, we are seeing that in order from one that was largely controlled by US to something that is very different," Dalio said, pointing to a potential transition to a new order.