Ray Dalio on Austerity in the Big Debt Cycle

2025-12-01

In 1979, I was so broke that I had to borrow $4,000 from my Dad to help take care of my family.

I had calculated that American banks had lent much more money to foreign countries than they would be able to pay back, and anticipated an imminent debt crisis.

But I couldn’t have been more wrong. I didn’t fully understand the impacts of quantitative easing, and so I lost money for myself and I lost money for my clients.

Looking back, it was the most painful experience I could imagine — but it was also the best thing that ever happened to me, because it taught me humility.

2025-11-21

The most important thing is that you have the life that you want to have. So, how you define success is important. There isn’t one path that’s right for everyone.

I was lucky in the sense that I fell in love with markets and playing the investment the game, which is what I’ve done for 50 years.

I recommend that people think about their own nature and what game they’d love to spend years playing. It’s okay to explore different paths—not everyone knows right away. Think of your journey as a process of discovery.

If you’re interested, you can find my full conversation with Bloomberg here. We discussed life, debt, global crisis, and the importance of investing in our oceans:

2025-10-29

The U.S.’s debts are on the edge of becoming unmanageable to the point where it could default if conditions are not changed.

But this problem isn’t a unique one. It has happened many times in history, which is why I believe studying the past is so important. The same cycles repeat over and over again, and there are important lessons we can learn from those experiences.

I recently met with Bloomberg @markets ahead of the UN Ocean Conference to discuss our debts, the possibility of global crisis, and the importance of investing in our oceans.

If you’re interested in learning more about our collective debt burden — and what steps we can take to solve these issues — I explain my thinking in my new book, How Countries Go Broke: The Big Cycle.

I hope you will read it and let me know your

2025-10-02

I can’t say exactly how effective Bitcoin is as a money, but it’s being perceived by many as an alternative money and so is worth paying attention to.

Money needs to be both a medium of exchange and a storehold of wealth — and the latter is more important.

I doubt that any central bank will take it on as a reserve currency. That’s because all of the transactions are public, so there’s no privacy to it, and there’s a risk that in the future the code could be broken to make it less effective through government controls.

My personal approach is that I do have some Bitcoin in my portfolio, but not much. @TheMasterInvestorPodcast

You can watch the full conversation here:

2025-09-08

When I look at the US and global debt burdens and how countries are likely to respond, I worry about the possibility of creating a stagflationary environment.

Our financial system is dependent on the idea that you can take a debt asset and convert it into money. But now there’s not enough money to go around.

That makes the idea of devaluing the dollar relative to other currencies appealing — but the other currencies won’t want much of an appreciation either. That’s one of the reasons I say that gold will be a better performing asset.

2025-09-03

THESE are the most important things for teenagers to consider.

2025-07-30

In an advanced economy, credit does more good than bad. But it’s important to remember that borrowing creates cycles — and if the cycle goes up, it eventually needs to come down.

I explain why this is particularly important today in my new book, How Countries Go Broke.

But if you’d like more context on how all of these pieces come together, I recommend you watch my 30-minute explainer “How the Economic Machine Works” here: &t=1444s

#principles #howcountriesgobroke #economics #credit

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