Ray Dalio on Falling Interest Rates and Rising Powers
What happens when increasing debt, expanding wealth gaps, and the rise of a great power combine to challenge the existing hegemony?
We discuss these issues with Ray Dalio, founder and Chairman of Bridgewater Associates, the world’s largest hedge fund. He has done a deep dive into the historical precedents for these issues. They provide insight into what is occurring in the present. The details are in his latest book, The Changing World Order: Why Nations Succeed and Fail, out on January 12, 2021.
We tend to misuse the term “unprecedented” for things that have not occurred in our lifetimes, but as Dalio explains, we should adopt a broader historical view. Many of what we believe to be unique events have occurred before: Money printing and monetization of debt, expanding wealth gaps, the rise of a great power to challenge the existing world order – all have historical parallels that provide insight into the present.
Dalio notes the effects on society, markets, politics, and the economy eventually reach a critical point. He suggests we may be nearing that juncture where the collective decisions made by central banks, governments and key institutions will have enormous ramifications for the future of the global economy.
A list of his favorite books are here; A transcript of our conversation is available here.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Overcast, Google, Bloomberg, Stitcher, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Mario Giannini, CEO of private equity firm Hamilton Lane. One of the few publicly traded PE shops, the firm oversees more than $500 billion in privately invested assets.