Squawk on the Street SOTS 2nd Hour: Ray Dalio's Debt Warning, Sen. Warren Slams the Fed and Wells Fargo, Trump Tax Bill Scrutiny 6/4/25
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Jun 4, 2025 
Ray Dalio, founder of Bridgewater Associates and author of 'How Countries Go Broke,' warns about the looming dangers of unchecked national debt and its potential impact on the U.S. economy. Senator Elizabeth Warren, known for her consumer protection advocacy, passionately criticizes the Fed's decision to lift Wells Fargo's asset cap, citing the bank's legal history. They both dive into fiscal policies, with Dalio proposing a '3% three-part solution' while Warren challenges the government’s approach to wealth disparity and accountability in financial regulation.
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Ray Dalio on U.S. Debt Crisis
- Ray Dalio explains debt crises mechanics and how U.S. is on brink of economic trouble due to debt and interest burdens.
- The U.S. must reduce deficit to 3% of GDP to avoid crisis, requiring a balanced 3% solution in taxes and cuts.
Balanced Approach to Interest Rates
- Artificially lowering interest rates without addressing debt supply-demand issues causes worse asset quality.
- Healthy interest rate reductions require balanced fiscal policies, not just Fed interventions or money printing.
Dollar's Reserve Status at Risk
- The dollar's reserve currency status is threatened by rising U.S. debt and expected depreciation.
- Similar debt struggles worldwide suggest concurrent currency depreciations, echoing 1970s currency cycles and inflation risk.