Modern Wisdom #976 - Ray Dalio - The Changing World Order: How Countries Go Broke
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Aug 4, 2025 
Ray Dalio, founder of Bridgewater Associates and billionaire investor, dives deep into the cycles of debt and power that shape nations. He reveals how countries can go broke and the historical patterns that often repeat. Dalio discusses the effects of rising national debt, the influence of artificial intelligence, and how wealth disparities are exacerbated by these economic cycles. He emphasizes the interconnectedness of global politics and monetary systems, stressing the urgency for a proactive approach to future crises.
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Dalio's Origin Story
- Ray Dalio's interest in how countries go broke started in 1971 after Nixon ended gold convertibility of the dollar.
- He studied historical economic crises like the Great Depression to understand and anticipate future financial events.
Five Forces Shape History
- Five major forces shape history: the debt cycle, political cycle, geopolitical order, active nature, and technology.
- These forces interrelate and repeat in patterns that explain economic and political cycles over time.
Understand the Debt Cycle
- Understand the debt cycle like a circulatory system where credit creates debt needing repayment to avoid economic strain.
- Watch debt service payments closely as rising debt squeezes spending and leads to financial crises.
