Fortune: Larry Fink joins Jamie Dimon sounding the alarm on 'snowballing' national debt: 'The situation is more urgent than I can remember!'
Article by Christiaan Hetzner in Fortune
America’s "snowballing debt"—at $34 trillion and counting—is putting the country on course to end up in a crisis reminiscent of Japan's lost decade, and Washington cannot take for granted the notion that investors will continue to fund its fiscal deficit forever, warns BlackRock CEO Larry Fink.
The CEO of the world’s largest asset manager also cautioned that the recent three percentage point increase in U.S. Treasury yields, to 4%—which reflects longer term inflation expectations and the Fed's aggressive interest rate hikes—is already very dangerous, since it amounts to an extra trillion dollars in interest payments alone over the next decade.
“The situation is more urgent than I can ever remember,” Fink wrote in his annual letter to investors on Tuesday. “There’s a bad scenario where the American economy starts looking like Japan’s in the late 1990s and early 2000s, when debt exceeded GDP and led to periods of austerity and stagnation.”
The national debt is rising at a rate of ......