Ray Dalio Says the World Has Seen It All Before

What happens when increasing debt, expanding wealth inequality and the rise of a great power combine to challenge the existing hegemony? Ray Dalio, the founder and chairman of Bridgewater Associates, the world’s largest hedge fund, discusses these topics as this week’s guest on Masters in Business. Dalio’s deep dive into the historical precedents for these issues provides insight into what is occurring now. The details are in his latest book, The Changing World Order: Why Nations Succeed and Fail, due out on Jan. 12. 

We tend to misuse the term "unprecedented" for things that have not occurred in our lifetimes, but Dalio explains that we should adopt a broader historical view. Many of the events we are observing today and describe as unique have occurred before in history. Money printing and the monetization of debt, expanding wealth gaps and the rise of a great power to challenge the existing world order all have historical parallels that provide insight into the present. Dalio notes the effects on society, markets, politics and the economy eventually reach a critical point. He suggests we may be nearing that juncture, where the collective decisions made by central banks, governments and key institutions will have enormous ramifications for the future of the global economy.

A list of his favorite books are here; A transcript of our conversation is available here.

You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Overcast, Google, Bloomberg, Stitcher, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Mario Giannini, the chief executive officer of private equity firm Hamilton Lane. One of the few publicly traded private equity shops, the firm oversees more than $500 billion of assets.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.