Principles for Dealing with the Changing World Order Quotes

“it is because of the United States’ great global successes that the US dollar became the world’s dominant reserve currency, which allowed Americans to borrow excessively from the rest of the world (including from China), which put the US in the tenuous position of owing other countries (including China) a lot of money which has put those other countries in the tenuous position of holding the debt of an overly indebted country that is rapidly increasing and monetizing its debt and that pays significantly negative real interest rates to those holding its debt.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“Mao’s view of capitalism differs from my own because his experience with it was so different, though both of our views of it are true.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“I also came to understand how having so much history to study has affected the Chinese way of thinking, which is very different from the American way of thinking, which is much more focused on what is happening now. Most Americans believe their own history is just 300 or 400 years old (since they”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“the value of assets is the reciprocal of the value of money and credit (i.e., the cheaper money and credit are, the more expensive asset prices are) and the value of money is the reciprocal of the quantity of it in existence, so when central banks are producing a lot of money and credit and making it cheaper, it is wise to be more aggressive in owning assets.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“remember the inflation psychology of that time very well; it led Americans to borrow money and immediately take their paychecks to buy things to “get ahead of inflation.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“Early in the 1970s, most Americans had never experienced inflation, so they weren’t wary of it and allowed it to blossom. By the end of the decade, they were traumatized by it and assumed that it would never go away.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“Napoleon was the classic great benevolent dictator who converted chaos into order and prosperity, and expanded the empire with his military prowess. As is often the case, he overreached and failed.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“At the same time, I am equally confident that there will be radical changes that will be traumatic for many people.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“When the flight of wealth gets bad enough, the country outlaws it. Those seeking to get out begin to panic.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“Still, without minimizing them, history has shown us that typically the majority of people stay employed in depressions, are unharmed in shooting wars, and survive natural disasters.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“As a result of the “Third Taiwan Strait Crisis,” the Chinese significantly built up their military capabilities in the region. I point this out to convey a) how important Taiwan’s reunification with China is and b) how risky the situation was 25 years ago, when China was not nearly as strong militarily as it is now. In short, I would worry a lot if we were to see a “Fourth Taiwan Strait Crisis.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“18. The Political Left/Right Cycle. Capitalists (i.e., those of the right) and socialists (i.e., those of the left) don’t just have different self-interests—they have different deep-seated ideological beliefs that they are willing to fight for. The typical perspective of the rightist/capitalist is that self-sufficiency, hard work, productivity, limited government interference, allowing people to keep what they make, and individual choice are morally good and good for society. They also believe that the private sector works better than the public sector, that capitalism works best for most people, and that self-made billionaires are the biggest contributors to society. Capitalists are typically driven crazy by financial supports for people who lack productivity and profitability. To them, making money = being productive = getting what one deserves. They don’t pay much attention to whether the economic machine is producing opportunity and prosperity for most people. They can also overlook the fact that their form of profit making is suboptimal when it comes to achieving the goals of most people. For example, in a purely capitalist system, the provision of excellent public education—which is clearly a leading cause of higher productivity and greater wealth across a society—is not a high priority. The typical perspective of the leftist/socialist is that helping each other, having the government support people, and sharing wealth and opportunity are morally good and good for society. They believe that the private sector is by and large run by capitalists who are greedy, while common workers, such as teachers, firefighters, and laborers, contribute more to society. Socialists and communists tend to focus on dividing the pie well and typically aren’t very good at increasing its size. They favor more government intervention, believing those in government will be fairer than capitalists, who are simply trying to exploit people to make more money. I’ve had exposure to all kinds of economic systems all over the world and have seen why the ability to make money, save it, and put it into capital (i.e., capitalism) is an effective motivator of people and allocator of resources that raises people’s living standards. But capitalism is also a source of wealth and opportunity gaps that are unfair, can be counterproductive, are highly cyclical, and can be destabilizing. In my opinion, the greatest challenge for policy makers is to engineer a capitalist economic system that raises productivity and living standards without worsening inequities and instabilities. 21.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“linked currency system” because the value of the currency is linked to the value of something, typically “hard money,” such as gold and silver.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“Related to this confusion between the financial economy and the real economy is the relationship between the prices of things and the value of things.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“we have to watch movements in the supplies and demands of both the real economy and the financial economy to understand what is likely to happen financially and economically.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“To create more wealth, you have to be more productive.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“When countries desperately need reserve currencies to service their reserve currency-denominated debts, and to buy things from sellers who only accept reserve currencies, they can go bankrupt.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“The monies (i.e., currencies) that are widely accepted around the world are called reserve currencies.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“debt eats equity. What I mean by that is that debts have to be paid above all else. For example, if you own a house”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“If you have a society where people can’t agree on the basic facts, how do you have a functioning democracy?”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“to the timeless and universal mechanics of why money and credit work and fail to work as mediums of exchange and storeholds of wealth.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“Humanity’s capacity to invent solutions to its problems and to identify how to make things better has proven to be far more powerful than all of its problems combined.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“Countries typically spend a lot of money on the military at this stage to protect their global interests, sometimes in very large amounts because of wars.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“Because their spending continues to be strong, they continue to appear rich, even though their balance sheets are deteriorating.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“In each generation, roughly a few hundred people made all the difference.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“History shows that when an individual, organization, country, or empire spends more than what it earns, misery and turbulence are ahead.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“I were to add two more determinants to keep in mind, they would be 4) the pace of innovation and technological development to solve problems and make improvements and 5) acts of nature, most importantly droughts, floods, and diseases.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“The inventive Dutch created the first publicly listed company (the Dutch East India Company)”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“I believe that it is smart to trust and invest in humanity’s adaptability and inventiveness.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail

“Human productivity is the most important force in causing the world’s total wealth, power, and living standards to rise over time.”
― Ray Dalio, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail