In this monthly book club edition of Yet Another Value Podcast, host Andrew Walker is joined by Byrne Hobart of The Diff and Capital Gains to unpack Ray Dalio’s latest book, How Countries Go Broke: The Big Cycle. The pair probe Dalio’s sweeping macroeconomic theories, debt cycles, historical analogies, and technology’s role in shaping the future. They scrutinize the credibility of Dalio’s claims, the real-world implications of sovereign debt risks, and the potential misapplications of macro trading skills to macroeconomic policymaking. The conversation winds through AI’s effect on productivity, the staying power of elites through societal upheavals, and even the viability of crypto as a hedge. It's a rich analysis with sharp skepticism and economic nuance.
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[00:00:00] Podcast and guest introduction
[00:01:38] Initial thoughts on Dalio’s book
[00:05:26] Short vs. long debt cycles
[00:06:40] Historical cycle timing critique
[00:07:24] Pre-WWI and 1930s comparison
[00:10:11] Disconnection between theories and globalization
[00:16:25] Institutional trust and economic cycles
[00:18:18] Credibility of Dalio’s theories
[00:21:26] Macro trading vs. macro policy
[00:24:42] Trump-era policy implications
[00:26:19] Foreign debt selling as signal
[00:28:14] Put options in tail events
[00:32:35] Buffett’s strategic puts example
[00:35:32] Technology optimism in final chapter
[00:40:25] AI effects on labor, productivity
[00:45:43] Older professionals using AI
[00:47:00] Book’s global bearish stance
[00:51:22] Historical elite persistence examples
[00:53:45] Bitcoin in crisis scenarios
[01:01:54] Sovereign wealth fund proposal critique
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