| History shows us that having too much debt during an economic downturn leads to a classic, self-reinforcing cycle where: 1) The empire can no longer borrow the money to repay its debts 2) It prints a lot of new money, which devalues the currency and raises inflation 3) Living standards decline, leading to the rise of political extremism 4) Turbulent economic conditions undermine productivity and there is conflict about how to divide the shrinking resources 5) Populist leaders emerge pledging to take control and bring about order #principles #raydalio #history #debt |
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How Domestic and World Orders Change
2025-07-07
An order is a governing system that helps people deal with each other in a structured way.
There are internal orders for governing within countries, and a world order for governing between countries.
Orders typically change after wars, when revolutionary new forces defeat weak old ones.
When this happens, new agreements and treaties are signed that detail how global governance and monetary systems will work moving forward. And a new world order begins.
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How Government Debt Reduces Your Buying Power
2025-07-03
History tells us the preferred path for government policymakers trying to deal with too much debt is lowering interest rates and devaluing the currency the debt is denominated in.
Doing this is a very hidden way of reducing wealth, because as your currency goes down, it makes it look like other things are going up. But despite the downsides, this wealth shrinkage and reduction in buying power is favored by policy makers precisely because its impacts are less obvious than the alternatives.
At such times, you should expect interest rates and the currency’s value to fall.
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Will the Central Bank Lose Independence Under Trump?
2025-06-24
It is the job of central banks to maintain a balanced economy by not allowing too much credit into the monetary system. Learn more about central banks and their responsibilities in my new book, How Countries Go Broke: The Big Cycle here: https://bit.ly/3F5OFvN
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Happy World Ocean Day
2025-06-08
Happy World Ocean Day and welcome to the OceanXplorer! We’re heading to the UN Ocean Conference in France where world leaders, explorers, and scientists are gathering to protect the oceans and better understand them through exploration.
The ocean is our biggest, most important asset, accounting for 72% of the Earth’s surface–so more than twice as much as all continents combined. It is incredibly interesting, valuable, and almost totally ignored.
And if you’re excited about the ocean, you can watch our series OceanXplorers on @hulu and @disneyplus I think you’ll enjoy it.
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