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nrt43's review against another edition
4.0
Ray Dalio’s The Changing World Order argues for what so many today feel – the world is changing, often in not-so-great ways. Dalio is undoubtedly exceptional when it comes to managing money, and most importantly predicting macroeconomic trends. He is arguably the world’s most successful hedge fund manager, starting Bridgewater Associates single-handedly from his New York apartment and growing it into the world’s largest hedge fund. So, his advice on what is to come ought to be taken seriously.
His argument is basically this: China is rising economically, and the US is declining. China will likely overtake the US on global power and influence relatively soon, and that transition will likely be difficult. To me, this was no surprise. He weaves his argument by looking at history, in particular the rise and fall of the Dutch and British empires, the rise and fall of many dynasties throughout Chinese history, the rise and fall of numerous currencies, and in particular the reserve currencies of the world.
Americans have the general expectation that things will keep going it has since about 1945 when the US became the supreme world power, but Dalio’s main point, which is a good one, is that our general view of history is much too short. We must look back further, and when we do, we see the evolutionary of rise and fall with all powers. No entity stays at the top forever. He spends about 500 pages detailing this point. His argument is systematic, thoughtful (and thought-provoking), and significant.
(What follows here is more of my response to the book than the book itself...)
What are the practical implications of his foreboding prediction of the near future? How do we wrestle with the possibility of World War 3 or another economic turn as bad as the Great Depression? Here are my reflections:
1. All predictions of the future must be taken with a large helping of salt, or however that saying goes. “Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same.” That said, as a textbook example of the Dunning Kruger Effect, I think Dalio is right.
2. Maybe I misunderstand them, but I am not sure Montaigne and later Roosevelt were correct when they said, “There is nothing to fear except fear itself.” The challenge is fearing what ought to be feared to the appropriate amount – an impossible endeavor beforehand. My limited experience has taught me that my worst fears, once experienced were not as terrible as anticipated. And sometimes, things should have been feared more, which really means, I should have accounted for risks and unknown variables more accurately by creating more margin of safety/redundancy.
3. As a Christian, there are a number of core beliefs that help here:
A - A fundamental Christian message is that God is with us, no matter the circumstance. There is a benevolent power that suffers with us.
B - Through the resurrection, we can believe with confidence that everything will be okay. Perhaps my favorite quote, emphasizes this point:
C. I believe this principle of “everything will be okay” is true both individually but also corporately. The truth of the resurrection is universal in nature, seen also through the evolutionary process, because out of death we have new life. In fact, newness almost always comes from death. For this reason, we can remain hopeful that this seismic shift will undoubtedly be difficult, but we can believe that what comes from it will be okay.
D. Finally, we as Christians believe that God is at work in all people and all places. There is nothing inherently good about the US being the supreme power. We can trust the Chinese government as much as we can trust the US government, namely, we don’t. Power always corrupts, and we place our trust in the mysterious, benevolent creator from which goodness flows, not governments or powers.
4. On a practical level, I do hope to make some modest changes in how I live:
All finances require a vehicle to travel, so in the question of where to save money, there are three I’ll move toward:
- I plan on investing my little bit of capital in real estate. This is an obvious tangible asset compared to stocks, bonds, or currency. And it was already something I’ve been hoping to do more.
- I’ll put some into cryptocurrency (rather than the stock market because as the dollar continues to decline in value, it seems [to me] crypto should go up). Dalio did not make this suggestion explicitly, but it was implied.
- I might try to buy a little sliver of land (again, a tangible asset).
4. Lastly, I want to be more self-sustaining. As Count Rostov repeated in Towel's A Gentleman in Moscow, “If a man does not master his circumstances, then he is bound to be mastered by them.” I think it’s a good idea to have a backup revenue of income in case one or two dry up. On a basic level, I would like to be less dependent on the systems, namely energy, water, and food. Admittedly, this fearfulness could morph into becoming a doomsday prepper. There is an undeniable incongruity between this idea, which is based on fear, and the trust in God I verbalized above. At the least it’s a tension, if not a contradictory lack of faith.
As a final thought - perhaps orthopathy (right emotions) is as important as orthodoxy (right belief) and orthopraxy (right conduct)!
His argument is basically this: China is rising economically, and the US is declining. China will likely overtake the US on global power and influence relatively soon, and that transition will likely be difficult. To me, this was no surprise. He weaves his argument by looking at history, in particular the rise and fall of the Dutch and British empires, the rise and fall of many dynasties throughout Chinese history, the rise and fall of numerous currencies, and in particular the reserve currencies of the world.
Americans have the general expectation that things will keep going it has since about 1945 when the US became the supreme world power, but Dalio’s main point, which is a good one, is that our general view of history is much too short. We must look back further, and when we do, we see the evolutionary of rise and fall with all powers. No entity stays at the top forever. He spends about 500 pages detailing this point. His argument is systematic, thoughtful (and thought-provoking), and significant.
(What follows here is more of my response to the book than the book itself...)
What are the practical implications of his foreboding prediction of the near future? How do we wrestle with the possibility of World War 3 or another economic turn as bad as the Great Depression? Here are my reflections:
1. All predictions of the future must be taken with a large helping of salt, or however that saying goes. “Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same.” That said, as a textbook example of the Dunning Kruger Effect, I think Dalio is right.
2. Maybe I misunderstand them, but I am not sure Montaigne and later Roosevelt were correct when they said, “There is nothing to fear except fear itself.” The challenge is fearing what ought to be feared to the appropriate amount – an impossible endeavor beforehand. My limited experience has taught me that my worst fears, once experienced were not as terrible as anticipated. And sometimes, things should have been feared more, which really means, I should have accounted for risks and unknown variables more accurately by creating more margin of safety/redundancy.
3. As a Christian, there are a number of core beliefs that help here:
A - A fundamental Christian message is that God is with us, no matter the circumstance. There is a benevolent power that suffers with us.
B - Through the resurrection, we can believe with confidence that everything will be okay. Perhaps my favorite quote, emphasizes this point:
“All shall be well, all shall be well, all manner of things shall be well, for there is a force of love moving through the universe that holds us fast and will never let us go.” - Julian of Norwich
C. I believe this principle of “everything will be okay” is true both individually but also corporately. The truth of the resurrection is universal in nature, seen also through the evolutionary process, because out of death we have new life. In fact, newness almost always comes from death. For this reason, we can remain hopeful that this seismic shift will undoubtedly be difficult, but we can believe that what comes from it will be okay.
D. Finally, we as Christians believe that God is at work in all people and all places. There is nothing inherently good about the US being the supreme power. We can trust the Chinese government as much as we can trust the US government, namely, we don’t. Power always corrupts, and we place our trust in the mysterious, benevolent creator from which goodness flows, not governments or powers.
4. On a practical level, I do hope to make some modest changes in how I live:
All finances require a vehicle to travel, so in the question of where to save money, there are three I’ll move toward:
- I plan on investing my little bit of capital in real estate. This is an obvious tangible asset compared to stocks, bonds, or currency. And it was already something I’ve been hoping to do more.
- I’ll put some into cryptocurrency (rather than the stock market because as the dollar continues to decline in value, it seems [to me] crypto should go up). Dalio did not make this suggestion explicitly, but it was implied.
- I might try to buy a little sliver of land (again, a tangible asset).
4. Lastly, I want to be more self-sustaining. As Count Rostov repeated in Towel's A Gentleman in Moscow, “If a man does not master his circumstances, then he is bound to be mastered by them.” I think it’s a good idea to have a backup revenue of income in case one or two dry up. On a basic level, I would like to be less dependent on the systems, namely energy, water, and food. Admittedly, this fearfulness could morph into becoming a doomsday prepper. There is an undeniable incongruity between this idea, which is based on fear, and the trust in God I verbalized above. At the least it’s a tension, if not a contradictory lack of faith.
As a final thought - perhaps orthopathy (right emotions) is as important as orthodoxy (right belief) and orthopraxy (right conduct)!
dupain456's review against another edition
5.0
This book did a very good job exploring the cycles of global power intertwining with their economy, and it brought to light some trends with the rises and falls of some of these countries that are really fascinating. It felt a bit repetitive at times, but other than that I thought that this book did a great job at teaching me things about debt cycles, currencies, wars, and the history of some powerful countries.
Score: 8.2
Score: 8.2
ignatius47's review against another edition
3.0
A general but practical bird's eye view of capital market history in the West and China.
s166harth's review against another edition
5.0
I would rate it 6/5.....this book has something for everyone