Hank Paulson Urges Emergency Plan for Potential US Treasury Bond Crisis
Former US Treasury Secretary Hank Paulson advocates for an emergency "break the glass" plan to address a potential collapse in market demand for US Treasury bonds. Speaking at the Semafor World Economy 2026 conference, Paulson warned that while the timing of such a crisis is unpredictable, its impact would be severe. This concern is echoed by other financial leaders, including JPMorgan CEO Jamie Dimon and investor Jeff Gundlach, who anticipate a bond crisis or potential unilateral reduction in coupon payments by the Treasury. The article references Ray Dalio’s analysis in "How Countries Go Broke," which outlines how nations with unsustainable public debt often devalue their currency or resort to money printing, leading to inflation. With US debt-to-GDP ratios rising and treasury yields approaching critical thresholds, experts suggest that if yields hit 7%, issuance strategies may shift drastically. The piece highlights growing anxiety among top financial figures regarding the sustainability of US government debt and the likelihood of aggressive monetary interventions to prevent default.
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