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#251 – Ray Dalio: Money, Power, and the Collapse of Empires

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Dec 25, 2021

Guest

Ray Dalio

Ray Dalio, legendary investor and founder of Bridgewater Associates, delves into the intricate relationships between money, power, and the rise and fall of empires. He discusses the cyclical nature of nations, focusing on the U.S.-China dynamic and the impact of governance structures on societal change. Dalio also emphasizes the importance of education and innovation for prosperity, while exploring the tensions surrounding trade and technology. His insights on cryptocurrency evolution and decision-making principles provide a thought-provoking lens on our financial future.

01:40:20

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insights

INSIGHT

Money and Power Dynamics

Money and power have a symbiotic relationship, supporting and competing with each other.
Those with money influence those with political power, impacting valuable asset control.

insights

INSIGHT

The Big Cycle

The "Big Cycle" describes the rise and fall of empires, impacting currencies and markets.
Key cycles include debt, internal order, and external order, influenced by factors like education and competitiveness.

insights

INSIGHT

US and China Comparison

The US shows concerning financial indicators, like increased debt and money printing, risking its reserve currency status.
China demonstrates better economic competitiveness but lacks the world's reserve currency.

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Healthy Habits and Effective Philanthropy

02:12 • 5min

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The Interplay of Money and Power Through History

07:39 • 3min

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The Rise and Fall of Empires

10:41 • 18min

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Education, Innovation, and Societal Prosperity

28:30 • 11min

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Conflicts and Contrasts: China, Governance, and Global Tensions

39:58 • 29min

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Geopolitics and Currency Evolution

01:09:10 • 21min

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Principles for Better Decision-Making

01:29:50 • 8min

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The Forces of Evolution and Human Progress

01:37:30 • 3min

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Meditations

Marcus Aurelius

Meditations is a series of private writings composed by Marcus Aurelius, one of Rome's greatest emperors, as he struggled to understand himself and make sense of the universe. Written between 170 and 180 CE while on military campaigns, this work combines Stoic philosophy with personal observations on leadership, duty, mortality, and human nature. Through twelve books of intimate thoughts never intended for publication, Marcus Aurelius explores themes of self-improvement, resilience in the face of adversity, and living virtuously while accepting what cannot be changed.

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The Beginning of Infinity

Explanations That Transform the World

David Deutsch

In this groundbreaking book, David Deutsch argues that explanations have a fundamental place in the universe and that improving them is the basic regulating principle of all successful human endeavor. The book takes readers on a journey through various fields of science, history of civilization, art, moral values, and the theory of political institutions. Deutsch explains how we form new explanations and drop bad ones, and discusses the conditions under which progress, which he argues is potentially boundless, can and cannot happen. He emphasizes the importance of good explanations, which he defines as those that are 'hard to vary' and have 'reach', and argues that these explanations are central to the Enlightenment way of thinking and to all scientific and philosophical progress.

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Principles for Dealing with the Changing World Order

Why Nations Succeed and Fail

Ray Dalio

In this book, Ray Dalio analyzes the most turbulent economic and political periods in history to identify repeating patterns and cause/effect relationships that drive changes in wealth and power. He studies the rise and fall of major empires, including the Dutch, British, American, Chinese, Soviet, and Japanese empires, highlighting the 'Big Cycle' that has driven their successes and failures. Dalio uses these historical insights to offer practical principles for understanding the current world order and preparing for the future. The book is organized into 14 chapters, each focusing on a different aspect of the changing world order, and it weaves together history and economics using real-world examples.

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Principles

Ray Dalio

In 'Principles: Life and Work', Ray Dalio shares the principles he has developed over his career that have helped him achieve success. The book is divided into three sections: the first section explains how Dalio's principles were formed from his personal and professional experiences; the second section outlines life principles, such as embracing reality, being radically open-minded, and understanding the importance of pain and reflection in personal growth; and the third section focuses on work principles, including the use of radical truth and radical transparency to transform an organization. Dalio advocates for systematizing decision-making into algorithms, learning from failures, and building a culture where it is okay to make mistakes but unacceptable not to learn from them.

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• Mentioned in 271 episodes

Sapiens

A Brief History of Humankind

Yuval Noah Harari

This book surveys the history of humankind from the Stone Age to the 21st century, focusing on Homo sapiens. It divides human history into four major parts: the Cognitive Revolution, the Agricultural Revolution, the Unification of Humankind, and the Scientific Revolution. Harari argues that Homo sapiens dominate the world due to their unique ability to cooperate in large numbers through beliefs in imagined realities such as gods, nations, money, and human rights. The book also examines the impact of human activities on the global ecosystem and speculates on the future of humanity, including the potential for genetic engineering and non-organic life.

Ray Dalio is an investor, author, and founder of Bridgewater Associates. Please support this podcast by checking out our sponsors:
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EPISODE LINKS:
Ray’s Twitter: https://twitter.com/RayDalio
Ray’s Instagram: https://www.instagram.com/raydalio
Books & resources mentioned:
Ray’s books: https://amzn.to/3swN5uw
Ray’s free personality test: https://principlesyou.com/

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OUTLINE:
Here’s the timestamps for the episode. On some podcast players you should be able to click the timestamp to jump to that time.
(00:00) – Introduction
(08:14) – Money or power
(11:50) – Big Cycle
(31:43) – Collapse of the American Empire
(40:10) – War
(43:18) – Xi Jinping
(49:21) – Importance of freedoms
(55:24) – Democracy’s vulnerability
(58:49) – Communism’s vulnerability
(1:05:50) – Vladimir Putin
(1:09:55) – Understanding China
(1:17:23) – Henry Kissinger
(1:27:44) – Elon Musk and Dogecoin
(1:29:41) – How to take notes
(1:33:24) – Advice for young people
(1:37:30) – Hope for humanity

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