Economics
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Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail
"A provocative read...There are few tomes that coherently map such broad economic histories as well as Mr. Dalio's. Perhaps more unusually, Mr. Dalio has managed to identify metrics from that history that can be applied to understand today." -Andrew Ross Sorkin, The New York Times
From legendary investor Ray Dalio, author of the #1 New York Times bestseller Principles, who has spent half a century studying global economies and markets, Principles for Dealing with the Changing World Order examines history's most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we've experienced in our lifetimes-and to offer practical advice on how to navigate them well.
A few years ago, Ray Dalio noticed a confluence of political and economic conditions he hadn't encountered before. They included huge debts and zero or near-zero interest rates that led to massive printing of money in the world's three major reserve currencies; big political and social conflicts within countries, especially the US, due to the largest wealth, political, and values disparities in more than 100 years; and the rising of a world power (China) to challenge the existing world power (US) and the existing world order. The last time that this confluence occurred was between 1930 and 1945. This realization sent Dalio on a search for the repeating patterns and cause/effect relationships underlying all major changes in wealth and power over the last 500 years.
In this remarkable and timely addition to his Principles series, Dalio brings readers along for his study of the major empires-including the Dutch, the British, and the American-putting into perspective the "Big Cycle" that has driven the successes and failures of all the world's major countries throughout history. He reveals the timeless and universal forces behind these shifts and uses them to look into the future, offering practical principles for positioning oneself for what's ahead.
From legendary investor Ray Dalio, author of the #1 New York Times bestseller Principles, who has spent half a century studying global economies and markets, Principles for Dealing with the Changing World Order examines history's most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we've experienced in our lifetimes-and to offer practical advice on how to navigate them well.
A few years ago, Ray Dalio noticed a confluence of political and economic conditions he hadn't encountered before. They included huge debts and zero or near-zero interest rates that led to massive printing of money in the world's three major reserve currencies; big political and social conflicts within countries, especially the US, due to the largest wealth, political, and values disparities in more than 100 years; and the rising of a world power (China) to challenge the existing world power (US) and the existing world order. The last time that this confluence occurred was between 1930 and 1945. This realization sent Dalio on a search for the repeating patterns and cause/effect relationships underlying all major changes in wealth and power over the last 500 years.
In this remarkable and timely addition to his Principles series, Dalio brings readers along for his study of the major empires-including the Dutch, the British, and the American-putting into perspective the "Big Cycle" that has driven the successes and failures of all the world's major countries throughout history. He reveals the timeless and universal forces behind these shifts and uses them to look into the future, offering practical principles for positioning oneself for what's ahead.
Editorial Reviews
"The book is a provocative read for those of us questioning where in the arc of history the American Empire resides and what may happen to the economy next. There are few tomes that coherently map such broad economic histories as well as Mr. Dalio's. Perhaps more unusually, Mr. Dalio has managed to identify metrics from that history that can be applied to understand today."
-Andrew Ross Sorkin, The New York Times
"Dalio's impressive book . . . has, if not changed my mind, then at least massively shifted the needle on how I see cycle theories. . . . Dalio avoids most of the traps associated with cycle theories. The Changing World Order is jam-packed with charts, showing long-run changes in major countries, often reaching back centuries. . . . He manages to do what many successful investors writing books about their investment lens fail at: delivering something new and interesting without giving away precisely the secret sauce that fueled his success."
-Joakim Book, American Institute for Economic Research
"Ray Dalio has a special talent for identifying the key questions of our time. In this sweeping new book, he marshals a variety of economic, social, and political measures to trace the rise and decline of nations. It is a serious contribution-and an urgent warning to the West."
-Henry Kissinger
"An audacious, practical guide to the rise and fall of empires over the last five hundred years of history-with important lessons for the U.S. and China today."
-Graham Allison, Douglas Dillon Professor of Government at Harvard University and author of Destined for War
"Ray Dalio has a unique talent for making important and complex issues simple. I was riveted by his descriptions of the cause/effect relationships that drove the last five hundred years of history and how they provide practical guidance for dealing with what is happening now. This may well be the most important book of the year if not the decade. A must-read."
-Arianna Huffington
"When Ray Dalio talks, I listen. His new book is remarkable in its scope-shedding new light on the biggest reasons nations win in the global economic and political arenas, and applying it to China and the US today. After reading this book, you probably won't see the world the same again."
-Henry Paulson
"Ray Dalio's latest book should be required reading for everyone. It would be irresponsible not to understand what Ray has laid out, steeped in history, serving as a roadmap for the future."
-Mary Callahan Erdoes, CEO of J.P. Morgan Asset & Wealth Management
"History is too important to leave to historians. Only Ray Dalio would have the brilliant auda...
-Andrew Ross Sorkin, The New York Times
"Dalio's impressive book . . . has, if not changed my mind, then at least massively shifted the needle on how I see cycle theories. . . . Dalio avoids most of the traps associated with cycle theories. The Changing World Order is jam-packed with charts, showing long-run changes in major countries, often reaching back centuries. . . . He manages to do what many successful investors writing books about their investment lens fail at: delivering something new and interesting without giving away precisely the secret sauce that fueled his success."
-Joakim Book, American Institute for Economic Research
"Ray Dalio has a special talent for identifying the key questions of our time. In this sweeping new book, he marshals a variety of economic, social, and political measures to trace the rise and decline of nations. It is a serious contribution-and an urgent warning to the West."
-Henry Kissinger
"An audacious, practical guide to the rise and fall of empires over the last five hundred years of history-with important lessons for the U.S. and China today."
-Graham Allison, Douglas Dillon Professor of Government at Harvard University and author of Destined for War
"Ray Dalio has a unique talent for making important and complex issues simple. I was riveted by his descriptions of the cause/effect relationships that drove the last five hundred years of history and how they provide practical guidance for dealing with what is happening now. This may well be the most important book of the year if not the decade. A must-read."
-Arianna Huffington
"When Ray Dalio talks, I listen. His new book is remarkable in its scope-shedding new light on the biggest reasons nations win in the global economic and political arenas, and applying it to China and the US today. After reading this book, you probably won't see the world the same again."
-Henry Paulson
"Ray Dalio's latest book should be required reading for everyone. It would be irresponsible not to understand what Ray has laid out, steeped in history, serving as a roadmap for the future."
-Mary Callahan Erdoes, CEO of J.P. Morgan Asset & Wealth Management
"History is too important to leave to historians. Only Ray Dalio would have the brilliant auda...
Readers Top Reviews
TheWildBoy
I read most of the chapters from this book on Ray's LinkedIn posts. Most people are disconnected from reality, as in, what is taking place around the world. I personally think most of the people in the West are disconnected in terms of where the world is heading and I believe this book does a great job to educate these souls about history and what they can expect in future. I will sum up my takeaway in few lines so you can save yourself time and effort... There are decades where nothing happens; and there are weeks where decades happen... As Howard Marks recently said: "I doubt most people could actually explain what a trillion is (that is, they likely have no idea that it’s a thousand billion, or a million million). And the scale of a trillion is almost incomprehensible. I was struck 30-40 years ago to learn that whereas a million dollars is $10 a second for 28 hours, a billion dollars is $10 a second for 38 months. Now let’s think about a trillion: $10 a second for more than 3,000 years. As I said, almost incomprehensible." With trillions printed, you should be ready for a ride of a lifetime. I am excited for great gains and opportunities are you?
Leo P. Vaulin
This book, along with Dalio’s “Principles”, should be taught to every person who wishes to succeed in this century. Left, right, or centrist - it doesn’t matter… in fact, if you treat the material seriously, it will help you bridge the political divides that today’s media are creating, and populist politicians are exploiting. This is long-term thinking, but not ivory tower… or dreamer; it does a better job of explaining money than any MBA finance class. As someone who has dedicated his life to serving - and thinking about - cooperative businesses, especially in the financial sector; I found this material both inspirational and alarming. It is disruptive thinking at its best.
Desmond Yuen
It is not just a book on economics. It is also a book on history. The book was written in a similar style like his last book "Big Debt Crises". He described history in cycles. I have not finished reading the whole book yet. But after going through some of the chapters, I woud say that he did a fabulous job in condensing 500 years of history in an easy to read format for the readers and the graphs also help to illustrate the points he was trying to make. The book answered a lot of my questions. For example, what is the impact of the different Pandemics to the world? Rather than seraching for answers on a lot of the different topics from different books, I can get my answers from this book. The other thing I like about the book is Ray is not dodging a lot of the tough issues he brought up in his book. If he is not the expert, he will tell you that this is something he learned from the experts. He speaks his mind. Frank and direct. Even if you do not believe in history will repeat itself, you will still enjoy reading this book.
Arturo Brillembourg
I’m grateful Ray Dalio has shared his world view and his access to leading thinkers and valuable sources of data, to make me more aware and better prepared for what’s coming. I am also friends with Ray, and I trust him. This book offers at least two major contributions. First, the synthesis and integration of economic, social, and geopolitical history that presents a holistic view of how countries rise and fall. Leveraging his relationships with leading thinkers and historians, Ray gives us a way to understand the major forces, cycles, and paradigm shifts that can dramatically change the world around us. You would have to read dozens of well-chosen books to gain such an understanding, and you still may not have a comprehensive theory. Second, the quantification of each major nation’s economic, cultural, and geopolitical health. With the support of Bridgewater’s multi-hundred-million-dollar research budget and team, Ray presents the key determinants of a country’s strengths and weaknesses through time, and relative to other countries. Seeing the most important long-term trends in charts provide useful perspectives that are unavailable elsewhere. Here are some of my biggest take-aways. Disorderly conflict is the pre-cursor to destructive conflict that is likely to be devastating for all of us. Both the winners and the losers of destructive actions are worse off relative to compromise, mutual understanding, and respect. As an American, I should not take for granted that I live in the most powerful country that has seen one of the longest periods of peace, economic growth, and innovation in global history. It’s not the norm, and if we aren’t careful, things could get a lot worse. Invest in innovation. Both as an investor and as a citizen, innovation has been a powerful force for improving lives and driving economic growth. We are likely in for a period of high inflation. The easiest way for the government to deal with high levels of debt is by printing money, using stimulus to spur economic growth, and keeping interest rates lower than nominal GDP growth. That is, to inflate their way out of debt. As an investor, he suggests avoiding long term holdings of cash and bonds. Instead, he recommends diversifying with assets that can do well in an inflationary environment, like highly dependable cash generating stocks, some gold (possibly a little cryptocurrency), and other scarce inflation-protected assets. This book is a major contribution. I strongly recommend reading or listening to it. If you don’t have the time, at least read the first few pages of the introduction, the first chapter “The Big Cycle in a Tiny Nutshell”, chapter 8 "The Last 500 Years in a Tiny Nutshell", and the final chapter called “The Future”. I hope you found this helpful.
