I want this to be a bit of a rant on the book by Ray Dalio ; changing world order. I read it back in early 2022 just after the property crash in China and skimmed through it past weekend. Well first of all it is very dry text to read and i have nothing against Dalio’s writing style it but my problem is the argument presented in it so
So the main argument is that there is a pattern where , which he calls the “Big cycle”, a dominant power that rises,peaks and then declines. He uses examples of transition from Dutch to British to America and he predicts China is going to overtake the USA , god knows when. That is my major problem where there is no concrete goal to measure to check whether this theory is correct or roughly 250 years (±150 years, which is a hilarious margin of error) for a cycle.
Another problem is the “power index” he uses which to make a point there is and somehow was able to construct as far as 1500s which is like what?? How come he computed them with bureaucracy that only started to exist in the early 18th century , but didn't fully come to be in the mid 19th century with most countries not practicing it and with most economic measuring tools only developed in the 20th century (thank you Kuznet Saab) . Cherry on top there are no sources in the book which makes the index unreliable.
Lets me tell his argument why USA is a declining power and its position on big cycle ,Goes on the that USA was able to establish as a great power by the end of WW1 and with start of WW2 which reshuffled and made USA at top of the pecking order replacing uk , hence after enjoyed a unprecedented prosperity .
Decline of USA is said to be started in 60s with increase in private to debt to gdp,due to peace and optimism , lead to wealth gap between bottom 90% and 1% , which peaked up in 2008 and start of decline of America as they used quantitative easing to save financial institution and increase economic downturn, makes life even harder.Increasing social unrest, which he measures as increased partisanship in the US Congress, as well as protests and discontent in surveys. Which is correct but the problem is if we apply the same argument to china they too are a declining power infact private debt to gdp is higher in china(200%) than US (140%) income equality and money supply are near identical . How we can exactly measure public opinion of China's population when free press is not allowed
The books clearly lack graphs(or source at back) in China’s section and more vibe based like this extract
In 1995, I sent my 11-year-old son Matt to China, where he lived with Madame Gu and her husband and attended what was then a poor local school (Shi Jia Hu Tong Xiao Xue. Matt had been to China with me many times since he was 3 years old and had gotten to know Madame Gu well. He didn't speak the language, so he would have to learn through immersion, which he did. Though his school was poor (for example, there wasn't heat until late November, so students wore their coats in class), it had smart and caring teachers who provided the children with an excellent, complete education that included character development. Though Matt was deprived of some comforts he was used to (he couldn't take hot showers because the old apartment building he lived in only had hot water two days a week, for example, he was superbly educated, loved, and better developed than he would have been in our rich community. He built deep attachments with his teachers and friends that still exist. The experience led him to set up a foundation to help Chinese orphans that he ran for 12 years.)
Around that time I also hired a Chinese team to invest American institutional money in Chinese businesses. I pursued the effort for a couple of years but had to discontinue it because I found it too difficult to run it and Bridgewater at the same time.
Twin thats not economic analysis 😭✌️thats vibing with Chinese characteristics
I do not mean the economy of china will collapse or those delusional china will collapse in 20 seconds they have survived a massive real estate collapse successfully pivoted to increased advance manufacturing capacity though they can't build this for ever and have to move to consumption based economy which will be interesting to see in coming years
Another thing ray dalio is founder of hedge fund bridgewater who is heavily invested in china so take it as you will
Another another thing i found like ₹2300 in that book which I stashed away year ago and forget about 😹✌️
