Intro -
Raymond Thomas Dalio, commonly known as Ray Dalio, is a famous hedge fund manager and the co-founder of Bridgewater, founded in 1975 in New York.
In order to make this theory one of his brainchildren, how did he brainstorm it?
On Sunday evening August 15th, 1971 President Nixon banned the conversion of gold into dollars, how did he figure out this theory and give US ka examples?
There was a time when paper money was exchanged for gold, and gold was used to pay for trades that happened between nations. Gold had to be kept with the bank and paper money provided by the bank had to be used to buy or sell anything. The U.S. kept printing money even when they didn't have enough gold to back paper money, so when U.S. citizens wanted to exchange paper money for gold, the U.S. began running out of gold, resulting in more and more people asking for their money back.
In 1971, on a Sunday evening, August 15th, President Nixon made the decision to stop the conversion of paper money into gold. Normal people like you and I would have expected the markets to tank the next day, but they shot up instead. Ray Dalio saw this and started studying the past to predict the future and this was the beginning of this theory.
He went ahead with his research and saw that similar events had happened in the past with different empires like the Dutch during the 1650s, the British during the 1850s, and now the U.S. during the 1970s. This made him realize that printing more money acts like steroids for the markets and this leads to a rise in the markets.
Future of America according to his theory
His theory holds that external conflicts between nations and empires lead to a change in the world order. A fall of the Dutch facilitated the rise of the British, and a fall of the British facilitated the rise of the U.S. According to his theory, a decline of the Americans could lead to the rise of the Chinese, and the reasons behind this could be their external conflicts with the U.S., China vs Taiwan conflicts, and the current situation in which the U.S. is caught up. It has occurred before in history, and it will continue to occur. Now if you connect to my last blog every dot will be connected on how evidently we can predict the fall of the U.S.
My opinion
I believe history has predicted the collapse of the U.S., which will result in a change in the world order, but this does not guarantee the rise of China. As in the past, governments that came on top after other empires collapsed were democracies, and China is known for its communism, so it is unlikely that it will become the next United States. Secondly, allowing the Chinese to dominate will be very risky for the world, even knowing the level of dictatorship practiced by the Chinese.
You can learn more about this theory by clicking on the following link -
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