Nations, or to be more exact, empires, succeed and fail, and that is what has happened in the last 500 years.This is about the Dutch, British and the United States Empires and the rise of China and the Renminbi.
We are before a confluence of political and economic conditions not encountered before. They include 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 such a confluence occurred was between 1930 and 1945. This realization prompted the author to search for the repeating patterns and cause/effect relationships underlying all major changes in wealth and power over the last 500 years.
All the empires and dynasties surveyed in this book rose and declined in a classic Big Cycle with clear markers and producing swings between peaceful and prosperous periods of great creativity that greatly raise living standards, and, on the other hand, depression, revolution, and war periods that include a lot of fighting over wealth and power.
There are three main phases of this cycle: • The Rise (Accumulation and Institution-Building): Characterized by low debt, high productivity, sound money, strong education, innovation, and social cohesion. •
The Top (Peak and Plateau): Characterized by peak power, high costs, heavy leverage, extreme wealth inequality, and a loss of competitiveness. •
The Decline (Unwinding and Breakdown): Characterized by debt monetization, high inflation, internal revolts, and challenges from external rivals.
Ray Dalio is a long-running New York Times bestselling author whose works also include Principles: Life and Work; Principles for Navigating Big Debt Crises, and How Countries Go Broke: The Big Cycle.
Principles for Dealing with the Changing World Order : Why Nations Succeed and Fail. Ray Dalio. New York: Avid Reader Press/Simon & Schuster, 2021.
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