The Economic Collapse No One Wants To Talk About - Ray Dalio

We're on the brink of war with China for various reasons. I hope we make it to 2050. The demographics is as I describe it, and by the way, them losing doesn't make us winning. So I think you're in the part of the cycle where you've had the tightening and the dominoes are beginning to fall, and I think that that's going to produce more problems. The most important thing is to have this basic well-diversified portfolio is important.

Two years ago, you made some predictions about the future for America and the global economy. How accurate do you think you've been?

Uncomfortably accurate given the whole picture, you know. Um, it's like watching the movie (laughs) for over and over again. Um, maybe I should explain. Uh, for about 55 years I've been a global macro investor and I learned that many of the things that surprised me never happened in my lifetime before, so when I would see certain things happen that were like that, I would go back in history and study, uh, prior periods. Uh, studying, for example, the Great Depression allowed us to anticipate the financial crisis in 2008. Anyway, there are three big things that I observed happening, uh, that didn't happen in our lifetimes but happened during the 1930 to '45 period, and they are the creation of enormous amounts of debt and the printing of money to pay for those debts, and it having its economic effects on inflation and growth. The second is internal conflicts, um, over the largest wealth gaps we had since then, uh, values gaps, um, and the rise of populism of the right and the left, um, those conflicts, again, largest since that 1930 to '45 period. And then the rise of a great power, uh, producing a great powers conflict internationally, um, with the rise of China as a great power, uh, challenging the United States and, uh, with Russia, so the great power conflict. That also is the, uh, most that that's happened since the, the Great Depression. So because those three things are happening now and, um, I didn't study them, um, I went back and I needed to study the cycles, these, what's happened over longer periods of time. So I studied, hmm, the last 500 years because these big cycles, uh, take about 75 years, uh, give or take about 50, so. Um, and, um, you know, like the rise and decline of the British Empire, the rise and decline of the debt... and that dynamic I shared, um, in the book and I also shared it in an animated video, uh, which is called The Changing World Order, um, and that creates a, uh, path. Now it's not just because they repeat in this way, but one can see the cause-effect relationships that are happening and, um, so that has pretty much transpired according to script. We can get into those pieces, but I'd say those are the three main ones. There were two others that, um, had big effect that I paid more attention to, um, that I'll mention. One was, um, acts of nature in the form of droughts, floods and pandemics. Uh, they were very disruptive when they happened, killed more people and, uh, toppled more empires and, or orders than others. And then also, of course, over a period of time, there's learning and producing new technologies that raises living standards, you know, it's raised per capita income, life expectancy and so o- and so... But those five fla- factors transpire, um, in ways that we've seen before to create this big cycle and it's, uh, if we can look at the cause-effect relationships, um, that's what I wanna pass along 'cause I'm 74 years old and I'm in a phase in my life that I want to pass along the things that are of value, and I think this is an important thing. But yes, it's transpiring according to script.