Ray Dalio on the Big Forces Shaping Global Conditions

Bridgewater founder and CIO mentor Ray Dalio sat down with Daily Observations editor Jim Haskel in this two-part series to discuss three of the five big forces he identified in his book Principles for Dealing with the Changing World Order and how these forces—which have driven markets, economies, and societies through history—apply to conditions today. The forces Jim and Ray discussed are: 1) the financial and economic force, including the dynamic of massive debt accumulation; 2) the internal domestic order; and 3) the international world order in terms of the relations between great powers.

The conversation covers a number of topics related to these forces, including what the great transfer of debt from the private sector to the public sector means for investors, the growing threats to the domestic political order, the US-China conflict, China’s economic challenges, and why China hasn’t yet engineered a beautiful deleveraging.

In Part 1, Ray describes his five big forces framework and uses it to explain the risks to investors at this stage in the long-term debt cycle and the growing threats to the domestic political order.

In Part 2, Ray talks through the third force in his five big forces framework: the international world order. Ray shares his thoughts on the US-China great power rivalry, China’s economic situation, and the rising prominence of India.