Review Of Billionaire Hedge Fund Manager Ray Dalio’s Book On the Debt Cycles of Empires

Feb 28, 2024 | Finconomics 101, No Bull Economics

In this post, we review Ray Dalio’s 2021 book “Principles for Dealing with The Changing World Order – Why Nations Succeed and Fail”. The bad news is that Ray is not bullish on the prospects for the United States based upon his multivariate analysis. In his estimation, the U.S. empire and its global reserve currency is getting ready to go the way of the previous British empire and the countless empires before that. The good news is that China is standing ready to fill the vacuum…   

Comments

  • It’s a good book & well worth the time to read if you have a sufficiently strong constitution to absorb the implications of Dalio’s conclusion – namely, that the U.S. needs to buckle up for a change in the world order. You can find the book on Amazon here.

Changes to World Order Graph
  • Empires tend to follow a common path of rise & fall which Dalio well illustrates by predictable cycles that eventually lead to excessive government debt and the loss of reserve currency status which ushers in the next empire to dominate the world. Notably, this was essentially the same message Putin made in his Tucker Carlson interview – namely that the U.S. needs to accept our fading glory & make room for the emerging new world order led by China, with the help of Russia of course…
The Changing World Order Chart
  • While Dalio has a lot of good reasons for his opinion, we suggest 2 points to consider: (1) there is still time for the U.S. to straighten out what has become very crooked; and (2) his 2021 assessment of China’s emergence & dominance may be somewhat premature, and even perhaps, exaggerated.   
  • In any case, the reason that we recommend this book is because Dalio’s warning is credible and must be taken seriously. However, there is nothing inevitable about these cycles & we can learn from the past (and this book) about how to right our ship. In fact, we can learn from the shocking economic fix enacted by Argentina’s Javier Milei – a subject of the next post.

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