Bridgewater founder Ray Dalio warned that Moody’s recent downgrade of the U.S. credit rating understates the real risks for bondholders. Dalio argued that credit ratings only measure the risk of the government not repaying its debt (default), but ignore the bigger risk: the U.S. government could print money to pay its debts, which would reduce the value of the dollars bondholders receive. As a result, investors could suffer losses not from getting less money, but from the money they get being worth less due to inflation. Dalio concluded that the risks to U.S. government debt are greater than what rating agencies currently convey
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