Ray Dalio is also the founder of the world’s largest hedge fund, Bridgewater Associates. He is a history fan, too. In this video, Dalio talks about how empires rise and fall in a certain way called the Big Cycle. He thinks that China will soon overtake the United States and become the world’s most powerful country.
We talked to Dalio about his theory about how empires rise and fall, and we learned a lot from him about it.
Does the Russian invasion of Ukraine and its effect on the rest of the world change your view of the world’s current direction?
The Russian invasion of Ukraine is in line with the expected path of the change in the world order. The process is moving very quickly now. When the two sides of the war (European and Asian) come together, we see how they look like they did in World War II.
Allied and Axis powers are both on show in Europe. The Allied powers are the US, Western European countries, and Singapore. The Axis powers are Russia, China, India, Middle Eastern countries, and Brazil. They are both on show in Europe.
One side is made up of the United States and Australia. The other side is made up of North Korea.
A lot of countries haven’t made up their minds yet about what they’ll do about this. We are now seeing how economic warfare is used and how sanctions are used to see if it works. We are seeing big deficits, money printing, and inflation, and we are also seeing the vicious internal fights between the more extreme left and the more extreme right. There are a lot of things that look very old.
When you think about how empires rise and fall, how do cryptocurrencies change the way you think about that.
This means that we are moving away from a single-currency world. Instead, we will have a multicurrency world. Currencies are both ways to exchange money and places to keep money. Because of a lot of debt and money printing to pay for it, the value of the major reserve currencies, which are all fiat currencies that can be printed without limits, is going down. Investors are looking for currencies that are store-of-wealth. In the future, there will be some that are run by the government and some that are run by people, like cryptocurrencies. They will be both digital and non-digital, like gold, and they will all compete against each other in the same way. The most important thing about all this is that we will see the dollar fall quickly because of all the usual reasons.
Do you think the Fed did too much to help the US economy when there was a virus?
Definitely. This means the Federal Reserve has two goals. First, they don’t want too much inflation, and they don’t want the economy to move too slowly, either. All of these things show that they went way overboard with the stimulus for a long time, which is not good.