How the Economic Machine Works – Part 4

2025-09-18

Ultimately, it all comes back to supply and demand.

Debt costs are higher in the UK than in the US because the British pound is no longer a reserve currency. It’s not an effective storeholder of wealth because people aren’t transacting in it like they do with US dollars.

Since many people around the world transact in dollars, that increases the demand and ultimately helps when it comes to servicing debt. @MasterInvestorChannel

You can watch the full conversation here: ?si=1nUp9HME9GFIrC95

2025-09-17

The increasing political polarization we’re seeing today isn’t anything new. It’s similar to what we saw in the 1930s, and it’s even something Plato wrote about a couple thousand years ago.

In democracies, people vote for their interests. And since people generally want more, politicians want to give it to them — and are willing to go into debt to make that happen.

Ultimately, things reach a breaking point where discipline is needed. People want somebody to get control of the government and make it work well.

But there are two versions as to who that somebody is.

In the 1930s, this led to the rise of fascism (for people who wanted a strong leader to lead a command economy) and communism (for people who wanted to redistribute opportunities).

Inevitably, these two clashing visions

2025-07-28

When great powers rise throughout history, they generally do so for the same reasons. These successful new orders are typically started by powerful revolutionary leaders doing four things:

1) Winning power by gaining more support than their opposition
2) Consolidating power by converting, weakening, or eliminating that opposition
3) Establishing systems and institutions that make the country work well
4) Creating systems that pick successors well over several generations

#principles #raydalio #history #empire

2025-07-14

I’m very happy to learn that my new book, How Countries Go Broke: The Big Cycle was selected by @barnesandnoble as one of their Best Business Books of the year.

The book conveys what I’ve learned over the past 50 years as a macro investor about the mechanics of how countries go broke — and what that means for the US today.

I hope you’ll read it and learn about it so that you understand what we’re dealing with, and what you can do to navigate the interesting times ahead.

2025-06-20

The Fed is in a very difficult position as it tries to balance the benefits of cutting interest rates with maintaining the value of money.

Right now, there is a great deal of uncertainty throughout the economy, along with a deterioration in sentiment.

Combine that with political pressures and the realities of our upcoming debt service payments, and you have this value of money conflict.

So changes in the monetary policy — especially if the cut is too aggressive — could lead to a period of great concern.

My advice: Watch the yield curve. If you see long rates rising alongside downward movement in the dollar and rises in gold, you’ll know there’s a movement out of bonds. Because the value of money matters a lot.

#raydalio #howcountriesgobroke #economics #markets