In Part 1 of this two-part series, Bridgewater founder and CIO mentor Ray Dalio sat down with Daily Observations editor Jim Haskel to describe 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.

The five forces, which Ray lays out in his book Principles for Dealing with the Changing World Order, are: 1) the financial and economic force, including the dynamic of massive debt accumulation; 2) the internal domestic order; 3) the international world order in terms of the relations between great powers; 4) acts of nature; and 5) technology.

In this video, Ray discusses the financial and economic force and how it connects to the domestic order force. He touches on where we are in the long-term debt cycle, the great wealth transfer that has made the economy unusually resilient, and the related risks for investors over the long-term. Ray also describes how wealth and values gaps in the US are exacerbating internal conflict, leading to growing threats to the rule of law.

In Part 2, Ray focuses on the international world order, including his read on the US-China relationship and China’s economy more broadly. Listen here:    • Ray Dalio on the US-China Conflict an...  

Recorded September 8, 2023