Dalio Critiques Current U.S. Quantitative Easing as Risky and Inflationary

According to BlockBeats, Bridgewater Associates founder Ray Dalio has expressed concerns about the current state of U.S. quantitative easing. He argues that while past quantitative easing efforts by the Federal Reserve served as a stimulus during economic downturns, the current approach is stimulating a financial bubble. Dalio highlights that when the supply of U.S. Treasury bonds exceeds demand, and the Federal Reserve is actively printing money and purchasing bonds, while the Treasury Department shortens the maturity of debt issuance to address the lack of demand for long-term bonds, these actions are indicative of the late stages of a classic 'big debt cycle.' The fiscal policies of the U.S. government are currently highly stimulative, driven by substantial existing debt and large deficits, financed through significant Treasury issuance, particularly at shorter maturities. Dalio suggests that this form of quantitative easing effectively monetizes government debt rather than simply reinjecting liquidity into the private sector. He warns that the current situation is distinct and potentially more dangerous and inflationary. Dalio describes it as a bold and risky gamble on growth, particularly growth driven by advancements in artificial intelligence, financed through liberal fiscal, monetary, and regulatory policies. He emphasizes the need for close monitoring to manage these dynamics effectively.