Ray Dalio, the founder of Bridgewater Associates, joins Julia La Roche on episode 68 to discuss where we are in the changing world order, the macroeconomic outlook, and the rising tensions between the U.S. and China.
Dalio revisited his thesis from his best-selling book, "Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail." The investor outlined three significant forces, including enormous debts and zero or near-zero interest rates that led to massive printing of money; big political and social conflicts within countries, especially the U.S., 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 (the U.S.) and the existing world order. Dalio points out that the last time that this confluence occurred was between 1930 and 1945.
0:00 Intro
1:52 Introducing Ray
2:14 Macro picture
2:56 3 big forces shaping the world
5:14 2 other big influences
7:20 Tracking the typical cycle
7:50 We're in stage 5 when there are very bad financial conditions and intense conflict
10:20 U.S. and China approaching greater risk of War
11:02 Debt problem
12:57 If you mark-to-market bonds at existing rates, you have a lot of financially hurt entities worldwide
13:35 Silicon Valley Bank is a 'canary in the coal mine'
18:00 Political internal fighting
19:45 Emergence of populism
21:41 The cycle in the U.S. since 1945
23:45 Over-indebtedness and increasing wealth gaps
25:38 Spend more than we earn, in debt, and large wealth, opportunity, and values gaps
28:01 Can we avoid the decline?
28:41 If Ray Dalio were president…
30:16 If you worry, you don't have to worry.
31:22 U.S.-China relationship
35:00 The redline
36:40 Brinksmanship
37:15 Risk of investing or doing business in China
40:00 World order breakdown
41:33 The bifurcation
43:00 'I know I'm scaring people…'
44:40 The biggest risk on Ray's mind
45:54 'One thing Democrats and Republicans are united on is anti-China.'
49:30 U.S. Treasuries
51:42 Portfolio construction
54:24 Diversify internationally
55:58 Status of the U.S. dollar, de-dollarization story
57:57 Bitcoin views today
1:01:01 Bridgewater, after stepping down
1:03:57 Parting thoughts
