Ray Dalio: Money, Power, and the Collapse of Empires | Lex Fridman Podcast #251

the following is a conversation with ray dalio his second time on the podcast he is a legendary investor founder of bridgewater associates author of a book i highly recommend called principles and also a new book called principles for dealing with a changing world order that looks at the geopolitics of today especially us and china to the lens of history providing a fascinating model for the rise and fall of empires that can be applied to the analysis of our world today this is the lex friedman podcast to support it please check out our sponsors in the description and now here's my conversation with ray dalio when you look at the history of the world as you have done in your new book principles of dealing with the changing world order what is more important more impactful money or power they go hand in hand they support each other and they um compete with each other those who have money have power a certain type of power um that power has to do with all that they can buy but it also has the ability to influence those with political power so um and and so you see this throughout history this symbiotic relationship you know um for example between um the royal families the nobility and the church so you see that group of people supporting each other in various ways and then wrestling around with each other for the money and power among that group so the dynamic that's quite classic is you could look at the parties in power back in you know the 16th 17th centuries you would look at uh royal families nobles and um and the church if you're in europe and then you would look at agricultural land and there was a certain dynamic and that varies over time it changes as those people get thrown out and technology changes so when we evolved when the society evolved so that it would produce goods and services and you have something like the industrial revolution the first industrial revolution you have machines and you have the talent of people that are off the farms and then you have a struggling for power you see that power mix change and so we don't see that same power mix anymore but you still see the same dynamic you see those with money dealing with those who have political power around those assets that are considered most valuable to particularly the productive assets that produce money and political power is usually centered around nation state so the major locus there's of power is the nations yes in 1668 after 30 years of war there was the development of nation states before then we had it was really the development of countries as we know it that there were borders and that within those borders uh those who had control got to control it and there was not to be intrusions in those borders and that's how we established the nation state and then of course within each country there is levels there is a central level and then there is a typically a province or state level down below and then there's a municipal level so they each have different levels of power and it's the coordination of those that determines how the country is run you write that the quote archetypal big cycle governs the rising and declining empires and influences everything about them including their currencies and markets the most important three cycles are the ones you mentioned in the introduction the long-term debt and capital market cycle the internal order and disorder cycle and the external order and disorder cycle can you describe this big cycle there are two orders there is an order by a sip order i mean a system how the system works so there's an internal order that is the internal governance system and it's usually set out in a constitution or some agreements and then there's the world order uh how the world system so for example in 1945 um at the end of a war which is basically a fight for determining the world order um the winners of the fight got together and created the world system as we now know it 44 they created the brenton woods monetary system that determined the money pretty much and because the united states won and had 80 percent of the world's money gold was money then and had 80 of the world's gold and it was half the world economy and it was the great military power the order was built around an american world order so that the united nations was in new york the world bank and the imf were in washington and they built that new order so classically you have a war to determine whose rules we're following and then you have um the new water beings constructed after that there is usually period of extended peace and prosperity uh peace suits prosperity um and so there's not and the reason you have the peace is because no one wants to fight with the um dominant power you know you're going to lose you've surrendered there's been the surrendering they carve up the world they say what it's going to look like who's going to control what and then you come into that period of of peace and then prosperity where then there's uh a working together usually at that point you've wiped out a lot of the debt you've wiped out a lot of the issues the class warfare and so on and then there's good working together so those great periods um such as the industrial revolution in the late 1800s or what we've experienced in the post-world war ii period are peaceful and prosperous periods led largely by the dominant world power over a period of time since really 1500 and maybe before but really 1500 when the dutch invented capitalism and what i mean by that they invest invented the first capital markets the first stocks and the first stock market um that since then capitalism has been an effective tool for building wealth because it got resources into the hands of inventive people that's when we moved from agriculture to the importance of inventiveness of people they got resources and then they built that prosperity in that process of doing that they create wealth gaps naturally those who make a lot of money make a lot more and than those that don't and it also produces opportunity gaps because uh for example those who earn a lot of money have that wealth they have the power to educate their children in a way that others don't and the gaps grow and also the debts grow at that time when they go around the world with their competitiveness they earn a lot of money so for example the dutch the dutch empire learned how to build ships um and that would go around the world a key ingredient of this improvement in this cycle is the improvement of education and by education i mean the skills that come from education but also civility the ability to deal with well together so the dutch invented ships that could go around the world and they had military power but they were also very inventive society 25 of the world's new inventions came from the dutch and so as they went around the world they also brought their currency and they brought their military they needed their the currency they paid for things um and that currency and then the more that happens the more that becomes a reserve currency and then they have their military so they need their military strength and so you see it evolve in all of those ways but over a period of time um as they become more successful and more expensive um they became they become more expensive um and and newer countries come along like um the uk um then uh be learned to build ships from a lot the dutch and could do that less expensively and also when they become more expensive so less competitive and also the work ethic begins to change they believe that since they're richer they can enjoy life more they don't have to work quite as hard and so you start to see the tilt now you start to see the development of the top and when you have a world reserve currency that allows you to borrow a lot of money because those who want to save want to hold your money and that means that they'll lend you money and so those countries get deeper into debt so you see that they gradually lose their competitiveness and they um and they get themselves into financial circumstances which are not good and they have large wealth gaps which set the stage for downturns and when they have downturns um the first question is do they have enough money and traditionally you know uh money is is resources um so you classically see that the coffers are bare that they're spending more money than their than they are earning and they run out of money in the coffers and their granaries are empty rather than stocked so that they give them the buffer and as that deteriorates that's that worsens conditions and if they have a rival power that's also challenging them they see greater internal conflict over wealth and then they have the problems internally and the problems externally which usually results in an internal war or an external war that leads to the change in the to the new world order and to you the dutch empire is a good example that the british what are some of the key examples that you think about in the book of this process that follow the big cycle well the leading reserve currency empires but it applies to all the empires um were the the dutch the british uh the american and the chinese um but um you could follow the same pattern um in the book i it was very important for me to not just use words and concepts because that's subjective it was very important for me to use actual measurements so as you see in the book you can see every level of this you can see where is the education level what is the military power each one of those and you could see them back going over the 500 years and so um you can see the arcs and the composition of those arcs and what you see is really in most countries in most dynasties you can see that but you also can see through those numbers the health um of those countries today um there are there are statistics that you could that are in the book that show what is the level of education what is the letter level of economic output what is the level of um military strength what is the level of a number of different measures of strength so that you can then compare that and i think that because there are objective measures of strength that you could see change that shows the picture of where we are today and i think one of the most important things about the book is that it allows people to monitor how those things are transpiring i think for policy makers um you know are your policy policymakers doing a good job and there's so much subjectivity in that but i think it's very simple if those lines on the chart are improving if your health index is improving then you're moving toward a better life so that's what the book works like also it was used to create a model for the future in other words there are cause effect relationships everything that happens has reasons causes that preceded it that made it happen and so by having all those in numbers one can see the probabilities of certain things happening so um that's what that's what you see in in the book it's not just you know rey's interpretation i didn't want to make it raise interpretation because i don't know if i'm right yeah so one of the fascinating things in the book so you have list these 18 measures and there's like a little scorecard for the countries of the world today so let's say u.s china and europe and what it was 20 years ago and looking at the change from 20 years ago and that's another indicator to change itself to see where things are headed maybe can you comment on from a score perspective how is u.s and china doing and in the 18 measures what are some measures that stand out to you is particularly important to think about today for the united states for china well there are a number um financially what you see in the united states is that um we're borrowing a lot more money creating a lot of debt and we're uh printing a lot of money and our capacity to do that is very much is limited first of all because um when you when there's a sale of a bond when the government borrows more than it borrows money because it spends more than it takes in um you have to sell a bond and the world right now has a lot of us dollar denominated bonds because as the world's reserve currency they sell sold on them and they have very bad returns negative real returns negative real returns significantly and so on so that um means that more bonds has to be sold than um are bought and that means that the federal reserve has is faced with the choice of having to raise the interest rate to curtail borrowing which slows the economy and hurts the markets or by filling that difference and producing money the debt monetization which produces an inflation in goods services and financial assets so in that regard that's our the united states's position in china's case its balance of payments um is a better um china has displaced the united states as the world's largest trading country in other words more exports to other countries and as a result it's economically competitive but it doesn't have the world's reserve currency it's a real blessing so the united states it has the world's reserve currency but it is risking it because of this imbalance so if you look at history you see that those go slowly but when they go eventually they go quickly so there's a risk of of of that financially then there's the issue of uh internal order so i'm just giving you the major ones but i'll get into some of the other ones too right now um there's a lot of internal conflict in the united states uh which affects its and um how well it works um in china there's less internal conflict because it's a more autocratic state but also they've created this bifurcation of what is political and what is um economic in terms of producing that prosperity so if you stay out of the politics pretty much um and then you're seeing um entrepreneurship you're seeing the finances of new businesses and so on and so that internal working um you know that's subject to different people's interpretations whether they like it or not but the internal conflict in terms of those kinds of measures is is less sorry to pause on that for a second so these measures i guess you don't want to sort of um romanticize any one measure or something like that over interpret any one measure but is internal conflict always a bad thing is some is this uh is it a complicated calculation or do you kind of the way we think about these measures that you've presented we should be thinking like the higher the better the lower worse or i mean of course depending on well in many cases the conflict that produces the revolution produces revolutionary changes that lead to resolutions that and lead to new starts and so their short term a short-term civil war is a hellacious experience and at the same time it can be um the transition to a new beginning um also there are different types of conflict uh competition which makes things makes everything better is is a productive conflict whereas destructive conflicts are not good over the short time so you know that's how that those go so within each measure the story is complicated yeah but my measures are are sort of clear meaning how much political conflict how much social conflict in other words you can measure conflict you can measure fighting you can measure crime rates you can measure um lots of different ways of conflict so the measures are a composite of different types of internal conflict what are some other interesting measures maybe if you can also mention like for me in particular interest is education and innovation yes the classic cycle the most important leading indicator is the quality of education most importantly broad-based education drawn as a from the largest population because you can never tell who the talent is going to be so where they're going to come from so for example if you look at the chinese dynasties the great chinese dynasties um and the confucian approach it was meritocratic of um everybody could sit for exams and so on broad base of drawing in the populations and you see that if you go across societies because that draws on the largest number of population to get education and it also um that creates um a reality and a perception that the system is fairer equal opportunity not just one of privilege and that helps to create social stability but education is not just uh education in understanding facts and so on it is education and um civility of how to behave together and so if they're smart they understand how to be productive because they work well together and they're productive and then that leads to the next stage you could see in the lines in the charts we i plotted these so that you could see in a typical cycle you could see that education is the long leading indicator and then you could see as you mentioned that you what you see is inventiveness and technology measures then follow and you see then also competitiveness in world markets follows for example in the early stages of a cycle the industries that they go into um tend to be very basic industry because they have cheap labor something like textiles and simple manufactured goods and so on but as the education rises then they move up the value chain to uh tech greater technologies and so on which raises incomes and raises productivity so yes those and and you know as you say there are 18 different measures like that but education um and then civility and the inventiveness so you see it reflected in in who's inventing what um and that corresponds then who's trading with who's a big trading country and where's the value of economic output and what are per capita incomes they all follow those arcs yeah like you said the fascinating thing about your book so there's philosophy there's wisdom uh but there's plots yeah you can see it so it's not just your opinion it's kind of like uh you can interpret it any way you like uh but you're just giving a lot of of your own insights along with the numbers if you were to look at the american nation the american empire and the trajectory is looking into the future given these measures what is the trajectory that leads to the collapse of the american empire based on these measures what are the concerning indicators and if um if those break down further what does that look like well all of those indicators are concerning um maybe except for one which is technology the technology niche although even in that area the united states is improving at a slower rate than is china for various advantages that they have there they put out about eight times as many computer engineers they have free data and so on but if you look at them so the financial is a is a concern the internal order disorder is a concern then if you look at education levels the united states is in many way is is losing its educational advantage if you were to look at compare it with china if you take general public education in the united states it's deteriorated tremendously even in comparison to developed countries there are scores pieces scores and so on and it's you know something like 38th in the world or something and that was a big plunge average public education if you look at the best universities in the world the united states is unique in having the best universities in the world so there are these privileged spots um that are you know excellent uniquely excellent so when you look at the comparison education in china is improving rapidly and it and the quantity is a quantity of educated people in the areas that they're moving in are is is greater and the resources that they're putting behind it is greater and so you see the results are greater um but um it's sort of along the lines that i'm i'm dealing with if you were to follow through in terms of um actual productions i i think uh you you know in terms of technologies um there are some areas that the united states is in a lead at the moment there's some areas that china's in a lead but china's gaining very quickly when i first went to china 1984 i would bring 10 calculators and i gave them away as gifts to high ranking people and they thought they were miracle devices um right now in terms of areas like quantum computing and a.i and and you know many areas you have a race going on and so if you take the trajectory of the competitiveness not just look at the current level you have a situation where they're improving at a much faster rate this is all good for the world if the world can get along and the main thing i think is um in just how do you have a healthy world and how do you have a strong economy and how do you have a strong situation is be strong the united states is war is with itself that's the main war you know it's very simple in history [Music] be financially sound earn more than you spend um and be strong in these ways and pretty much everything will take care of itself but you make it sound simple of course because there's a momentum when things degrade when the education system degrades when you start borrowing when um i mean all of these indicators once once they start going down it's uh there's a momentum to it right so it's hard to reverse it right and there are circumstances that you're then in uh for example indebtedness you know it's politically desirable for those in to borrow money and spend because their constituencies only look at what they get and when they get a lot they don't pay attention to the balance sheet and how much debt is on the books so it's always better to borrow spend and then leave the cleanup to the next guy and so you inherit a lot you inherited as a new president enters in or new legislators they have a lot of debt they have a broken down infrastructure um they don't have enough money to fix that and so that's the lay of the land that the prior generations put you in and there you are and so that's right um it's difficult because when you start to think okay what's healthy well spend earn more than you spend well that's not so easy because you know what does that mean go earn more i mean okay that's not so easy spend less that isn't going to work so now what do you do okay you have this debt that you then monetize and that's why it's classic so yes that's why these cycles occur because what has created before put what happened before created the lay of the land that is then increasingly difficult to deal with so what can great leaders do in this moment i mean maybe um my sense is leadership is crucial here so for example to do very large projects that invest in the education system that sort of try to fix the fundamentals or maybe invest more and more into the innovation and the develop development of new technologies and so on it feels like that just doesn't happen organically so you have to have strong leaders that convince the populace of the importance of these ideas well i completely agree with your list what we have is a situation where everybody has their opinions and they have to sort of get them exactly right and they all fight with each other about whether their opinions so the most important thing is that we are become bipartisan so that we don't and we get over our differences i would have a bipartisan cabinet i would draw upon um both members of both parties the the moderates who are going to be able to work together so as then we have one country and then we deal with those in a means that works for the majority of the people in the middle rather than the polarity i think our greatest risk is in not being able to do that so i would say that's a paramount importance because we have the resources you know um wealth real wealth and and science and everything has never been better than it is but the notion is that it has to work for the majority of people and we have to keep it being productive so that that group has got to calmly and knowledgeably work together so that they increase the size of the pie and they create broad-based prosperity so that is a paramount importance whatever they do if they do it that way i can say i'm happy about because that other alternative is the really scary alternative the the scary alternative the different ways it has evolved throughout history some of it has led to wars what are the future trajectories that lead to a potential war with china cold war or hot war is this something you think about is this something you're worried about yeah i'd like to talk about both wars so the war with china as i say there are five kinds of wars there's a trade war tech um technology war geopolitical influence war um capital war and military war i um as far as military war goes i only i think it's only a taiwan issue um but that's a big issue and we could talk about that for a minute but those others there'll be uh rough competitions and we'll have that type of evolution over a period of time that's what that war looks like taiwan has been for a long time a sovereignty issue to china and it has its roots in what's called the hundred years of humiliation from the 1840s to 1949 foreign powers came in took advantage of china they had the opium wars and such times and and that represented the 100 years of humiliation and taiwan represents is their sovereignty and their important thing and 50 years ago starting 50 years ago there was an agreement that there is one china and taiwan is part of china and that there would be peaceful reunification the the peaceful reunification hasn't happened and in their view that's a very big issue and so it's a big contentious issue and that uh could produce a military war um could produce a military accident could produce a it's a very tense situation and if we had a military war god help us because of the capacity in all different new ways to inflict um harm on each other but anyway that's that's that if you don't have that military war you'll have the competition between those other kinds of wars and whoever is strongest in those areas will um win where do you put cyber war within the five well cyber war is a military war i'm assuming the type of cyber war that you're using you're referring to is that which it's used to inflict pain on the other party through cyber so cyber wars you'll see cyber war you could see space war you can see drone warfare you um new types of warfare not just the traditional and nuclear type of warfare but you could see any of the above what are the defining characteristics what are the interesting things about xi jinping the president of china as a leader on the world stage his father was a early leader he was himself [Music] in the cultural revolution at times treated brutally um and during that period of time it was very very difficult and he came up you know through the ranks and he's a very intelligent man when he first came to power they as you know they have two five-year terms and we're now coming to the end of the second of those five-year terms when he first came to power he felt that there should be a lot of reform and reform meant moving to much more of a market an open economy when that happened in him coming in i had some contact with economic policymakers but and the circumstances then were that five major banks lent to state-owned enterprises and local governments with implied government guarantees and so there was not control of that and they and the movement to aim more of a market economy and the development of markets uh was a primary and also the dealing with the corruption issue there was a lot of corruption prior to that and that was viewed as an existential threat to the system so that became the primary objective and then as time progressed over those 10 years there was a a lot of changing in the world finance their financial circumstances opening many many other markets they particularly getting money to small and medium-sized enterprises and developing a lending system and then establishing controls on it so right now um there's a vibrant um capital markets um you can raise capital you can be an entrepreneur you can become a billionaire um in the capital markets and they develop the markets to be the second largest capital markets at the same time um they had to deal with their um rising debt issue which they began to deal with uh really about four years ago when the second term began and the um and then uh lu huh became um the vice premier um responsible for that and to um and deal with uh those issues so you see right now that what's happening is uh the dealing with the real estate bubble there was a development in real estate a bubble which produced um a lot of unproductive lending and xi ping said you know houses are meant to live in not to speculate on and so that was wasteful so they established what they call three red lines which are financial ratios that the property developers had to live within and that is then causing the adjustments that are going on now which in my view are very healthy because um whenever there's uh bankruptcies and so on the most in the public think okay that's a problem it's in many cases really a cleaning up of bad debts and bad practices and so um that's what's going on so that's let's say economically at the same time there is the changing relationships the changing world order the changing relationships with the united states and other countries which is becoming um much less cooperative and much more war-like much more confrontational um those two things the the domestic debt problem and domestic has led to um what's called core what they call core leadership which means a leadership more around him that is less challenging because they believe in history that during very difficult times um a more centrally controlled decision-making process lends itself better than to a more fragmented political contentious project and that's basically what's going on now you said it very eloquently but you mean the leadership is surrounded by yes men and there's a lot of centralized control that characterization is view is much more black and white than it really is uh but it leans towards that direction they're like for example of the standing members of the polar bureau four are more eligi allied him three or less so you have to understand that it's kind of a collective leadership at the top and then of course there's just jockeying for power um you know in a highly political sense um at the top uh but no one leader can be successful against the uh all those powers at the top so it's very politically negotiating it's you know it's very much more like if you put um in the united states the democrats and the republicans and they had to be in the same government and they work it out uh it's kind of something like that and then so that's that struggle but it's an internal struggle where do you put the importance of some of these ideas at the founding of the united states when then now we're talking about at the context of china the freedom of speech freedoms what china is doing with the central management of a lot of things it's enabling a lot of growth but it's also limiting people on the very basic level in terms of freedom the kind of freedom that i think can lead to entrepreneurship to starting new businesses to having big dreams and chasing those dreams and then creating totally new things in whatever the space maybe in technology in business and whatever what how important is that as a metric for society well they have a view which is the idea of a dialectic which means that two things are at obvious that everything comes with pros and cons and two opposites exist and you want the benefits of those two opposites and how do you deal with the benefits of those two opposites right so let's say you want the capital markets because it gets uh money into the hands of the entrepreneurs who are motivated they build fortunes and that drives an economy to do very well and at the same time um it produces uh the other problems the wealth gaps the other problems then the debt cycle that we're talking about and so on and deng xiaoping you know how do you reconcile communism and um the market economy and the capital markets and he uh famously said um and if it doesn't matter if it's a white cat or a black cat just as long as it catches mice in other words if it if it works in making the country richer then that becomes the objective and then they move that along so there are these conflicts um and um one of the leaders described it to me as follows because it's confusion and it goes back over a period of time there's a a hierarchy and it's an extension of uh the family he described it and he said the united states is a country of individuals and individualism and that is its vibrancy that um we see the individual rights to speak up the individual [Music] protection of the individual individual property rights and all of those things as of uh paramount importance and we build our organization that's why democracy is from the bottom up or even a company we'll get together and we'll be partners to proper prosper together that is the american approach um he was describing that in china it's an extension of the confucian family essentially and so it's almost like um um you know there's a hierarchy and so what they think about is the common good uh not the individualism so for example if they want a high-speed rail to go from one place to another and that's best in the common good then the individual protections that would stand in the way of doing that would be of secondary concern so that notion of uh controlling so it it for example um the what what they're doing with uh video games um they um control uh what type of video games and how many hours a day kids can be on video games um operating in that way because they believe that that's good for the society and that's very controlling in the united states i i think probably most parents would say leave it to me and it's it's a matter between me and my kids the same thing has to do with data in other words in the united states who controls the data does the company control the data do you individually control the data and so the inclination would be to figure that out but nobody would say that the government is going to control the data because of our inclination of really anti-government control in china it would be that the government will control the data because that's going to be best for the society and it depends who you trust but that's so that difference in philosophy is very much at the um you know at the heart of that as far as um your question in terms of effectiveness it really is in china's case it's how you balance the things right so what they're attempting to do is to create a lot of freedom and creativity um in areas that are not uh political let's say and and so you see on a lot of entrepreneurship you see a lot of product development you see a lot of creativity um happening in that way so the stereotype that you don't see creativity happening is is an old stereotype where's a lot of creativity certainly happening and the system can work well if they can achieve that kind of balance it's proven to have worked well since i started going there in 1984 per capita income real per capita income has increased by 26 times the um longevity rate has increased by 10 years the poverty rate has fallen from 88 to less than 1 in terms of you know basics like starvation and things and if you read history plato's republic you know he talks about the cycles democracy you know an autocratic and the benevolent despot and all of that each has their own vulnerability the vulnerability of democracy which has been a remarkable remarkable system and i don't have to extol the benefits of it um but the vulnerability of it has always been uh the um internal conflict that produces itself as anarchy um in world war ii uh four democracies chose to be autocracies um because there was internal disorder and there was this is the belief will somebody bring about order and get control of the situation you know that was in um germany italy uh japan and spain um they were parliamentary dictat systems that uh turned themselves over to that so both systems um have vulnerabilities um i think the main thing now that we need to think about is those vulnerabilities democracy is an amazing system because it requ the the adherence to the rules and the system and the checks and balances is quite amazing and it gives it a flexibility to change without civil wars um um but there has to be the respect of the rules and when you see something like that they will not accept elections or they will not accept rules and history has shown when the causes that people are behind are more important to them than the system the system is in jeopardy so we have a situation that's very much like that in terms of let's say the 2024 elections i believe that there's a very high chance that neither side will accept losing for example and so we um we have that kind of a situation so one would hope that one could rise above the disagreements and rely on the system uh for resolving disagreements because if if that doesn't happen then we have our own uh chaos so the kind of the trend that started in 2020 this or i mean i mean i suppose it's been there it's been growing a rep one representation of this internal disorder has been the growing trend of being skeptical about the results of the election well it started before that there was the emergence of populism where before uh president uh trump was elected he was basically elected as a populist because there was a large percentage of the population that felt that the system didn't work for them and he tapped into that and he was largely elected as a populist leader first populous leader in a developed country um and so populism began that then and that was a battle of one group against the other group and so since then it's been like that and it continued to grow you've mentioned the vulnerability of democracy that internal disorder is the vulnerability of democracy what's the vulnerability of a system like china maybe one way to say is put china aside and look at history like a soviet union what's the vulnerability of a communist type system well i'll call it both communist and autocratic sure depending on how much autocracy is that it lacks flexibility it it lacks um the ability so but i should deal with them differently um in other words there's the economic system the economic system um threatens motivation and productivity so communism or socialism uh has to be done in a way where um you can threaten productivity capitalism has and what i mean by that i mean free markets and capital markets i have been an effective way of allocating resources and also creating the the incentives and the resources providing the resources for the inventiveness of new ideas and so if i compare that what the chinese have done to a large extent is to recognize that and have made a move that's why the uh seeming dialectic or the conflict between those two things exists but anyway that's it as far as an autocratic system rather than um one man one vote from the population up the risks of the autocratic system is that there's enough discontent that arises that the system doesn't have the flexibility and that rather than bending um it breaks um that's that's the big risk um the notion of trying to control a um if there's that rather than giving it the flexibility um so that's the that would be the big risk of the autocratic system what's the human uh because you mentioned like the top gets bigger with empires and you start taking things for granted is the some of this just human nature so the concern with with china with autocratic nations the concern with the the third reich the soviet union was that fundamentally at the individual level the humans involved at the top they start becoming they're starting to lose touch with reality in a way that no longer makes them i guess that's the representation of the flexibility that you're referring to well i'm i mean in a democracy you could change you can go as far left or as far right you can change the leaders easily and so the people don't become um you know they pretty much only have themselves to blame uh yeah you know and one of the problems of that is they may not choose the best leaders but they they have that flexibility so if vote and you get what you wanted in the case of the autocratic let's say leaders and then the movement from democracies to autocracies what you see normally that movement is that one of the systems is it is not working let's say the democracy is not effectively everybody's arguing with each other and nobody's getting anything done and you know like mussolini the trains are not running on time and that would be the example jesus this place has gotten chaotic will somebody get into control and then they then you get the autocratic um and then he's autocratic enough to boss people around and um and then you follow those kinds of orders and it's like a maybe a ceo in a powerful company ordering around and that could work well or it could work badly you know most um companies are run as um like autocracies in a sense you know there's the hierarchy and you the command economy and that kind of thing and now that can work well or not um but then what quite often when you get the populist autocratic their personality is something that they want to fight and they become more nationalistic and they tend to become more militaristic and human nature at that stage lends itself to fighting there's an arc here that when we think it's we think of a country um and we say we when we think of a country um it's not true it's not like that there are individuals who change one generation dies and another generation comes along and one of those arcs is that um the ones who have been through war don't want to go to war and are more happily you know willing to um abide by whatever the rules are as you get farther along into that cycle and you get a new generation and they forget about wars and the horrors of wars then they um then they want to uh uh fight and so you're seeing right now the emergent of fight for right and and what that means is you see it internally uh fight where are you and fight for that thing and they mean fight and then into externally fight are you going to be uh the strong one who will fight and win and that develops on both sides this fight and win and each side is cheering each other on into uh a war but that's comes by those who really have not experienced war because it comes in their part of their lifetime humans are fascinating humans are fascinating and by the way human nature has not changed over the thousands of years so it's the it's so interesting because like in doing this study and it comes across in the study it's like watching the same movie over and over again you you know you see the ark and you see it happen over and over again the only things that seem to change are the clothes people wear and the technologies uh yeah and then somebody probably will disagree with you about the clothes maybe there's also cycles within fashions maybe we're not even creative there uh what do you um make of uh russia and vladimir putin what do you think about putin as a leader as a human being on this world stage within the context of the cycles of empires that you think about well putin came to power at the failure of russia's last order so there was there was the end of communism and there was the development of the market economy the collapse of the soviet union and at that time he was appointed by yeltsin who was an alcoholic and had problems managing and was put into power and the conditions in the russian were the work there was anarchy um there was no money it was it had the classic end of cycle ingredients it was broke it was people were fighting with each other was the anarchy and that's when he came to power and um there were not institutions the whole thing had collapsed and it was not effective ministry of education ministry of anything and so the idea was that they needed 25 years of stability and they needed a democracy and they needed the the improvement of capital markets um so he's been in that position as a um as i guess i would call him um a semi-autocratic leader in that from all indications he would respect the democracy um and he's very popular he's won democratic elections because he's been a strong leader and he's brought uh peace and stability to the soviet u to to russia after the breakup of the soviet union and um he's a strong leader in pursuit of the the country's interests in um a way where russia is not a significant economic power and but it is a significant military power um so um the issues and then there's a strong alliance between russia and china now um so that's kind of the lay of the land and then there are sensitivities the ukraine issue is uh a sensitivity um because of there are a lot of russians who live in the ukraine and there's also the issue of nato on it on their border um so there are those kinds of things and he has military power and he has a strong alliance with china um and i guess that's my best summary of um what his position is strong leader um popular um [Music] these are not subjective interpretations these are uh objective interpretations yeah it's interesting just in this conversation you're not sort of um doing the usual criticism of any one particular system you're looking at these systems from the perspective of history you're just describing how they work it's often times when you talk about what russia is today or what the soviet union was or what china is today is you start to criticize well they they do this kind of censorship or they do this kind of they limit freedoms in this kind of way but you're just kind of describing this as a nation with ideas what they think is right this is how they hope to get it to work this is why it's working this is what's not working here's metrics that show that it's not working i think that's a refreshing way to think about it it's easy though i mean you got some criticism um saying that i think china's a strict parent um you know some people criticize these countries for doing uh so for violating human rights i suppose there's some people that criticize the united states violating human rights but what are your thoughts on the world stage today about some of the behaviors of this government in terms of respecting the rights the basic rights of human beings you described accurately how i just try to look at things in an um a non i don't want to impute my values yes on anybody um i mean there are intolerable things so i'm not saying there aren't intolerable things but um one of the great things of being an american here is that i grew up with all different nationalities having all different points of view and all different religions and all different ways of operating and i've come to treasure the fact that that is you know what's their business is their business and then the question is where do you cross the line under what circumstances that that others have got to do it my way and then when you do it internationally uh the ob the issue of what is a sovereign state you know which um as i say in the piece of west failure and you have borders and you then when do you cross the line that um my way of doing things has got to be their way of doing things or what are the various rights and so that's a very uh delicate question or a very difficult question and we all have responsibilities to different parties and we all have different levels of knowledge about those particular things so um so for example as an international investor i have a responsibility to my investors those who run companies have a responsibility to theirs of how do they run that so if you're taking nike or stinkers and so on and americans can decide whether they want to buy product chinese products or not buy chinese products we are all faced with those types of choices so you have what do you want to do in your constituency and you have your choices and then beyond that in many cases the issues are quite complex like there are geopolitical questions that enter into it so um uh and then i i believe that if if you disconnected if all those if entities like myself the businesses uh doing business with china disconnected i think that that would be disastrous economically disastrous and it would also be um reduce um the the understanding that comes from working together that helps to reduce wars and so these are all complicated so what we do is uh and and who makes it my opinion matters the most why should it be my opinion that matters the most in making that decision so i largely look at the guide the government guidance that i get not only from my own government but from the other governments and i follow the rules i'm in 40 we invest in 40 countries and we want to do that in the best way to provide the diversified portfolio and we sort of need that every one of those countries has similar complexities there are always one issue or another and then and there's only so much that we really understand about all of those issues so we rely largely on the guidance that we you have get empathize and show respect to the the culture of the place the way things are done you don't necessarily um the way you heal relationships between nations is like like you said you work together and that requires kind of um to listen maybe more than you talk and i think people in the public sphere uh talk a lot about china without really listening without understanding much about china without one of the things that makes me really sad because i know how to speak russian and i can i know how much is lost in translation it makes me sad that i'll never really get to know the chinese culture because like i'll never really get to know the language the literature the just talk to regular people it's not just the government or officials or scientists just regular folks get the culture i think if you don't understand the culture uh just the basics of the human nature of what people love about their country about their family or the kind of hopes they have you know what kind of values they have without that you're not going to be able to um fully um connect with them and you have to do that first to have a chance of building a good world i couldn't agree with you more i was very lucky because as i say uh you know since 1984 so for more than half of my life i've been going there and i and the common people and all sorts of people and i've got to meet them i don't speak the language but it a combination of through translators or men them speaking english and being in situations i had my son go to school a local school and we we developed those kinds of understandings i think that um but the not wanting to know the other perspective is the thing that's most scary yeah like i'm right now in the middle and um and all i want to try to do is to help mutual understanding you're right if there were questions probing me asking me what is it i'm not on one side or another i get i don't want to be on one side or another i believe that each has their right within there to approach their different culture in their own way so many ways you gave an example it uh um if they're not um doing harm to others i mean so but that issue of um trying to understand is so much better that doesn't mean agree with if you are wanting to out-clever and out-compete somebody it still pays to understand what they're thinking so to achieve understanding of what they're thinking even if you want to go to war with them that understanding is the best thing to have what we have now is a situation in which there's an enemy mentality and that means that anything that serves the seems to be like understanding or conveying understanding seems to mistakenly create the notion of i'm on their side in a war and that's kind of a dangerous thing because um there's a momentum here to fight henry kissinger praises your new book and you thank him in it in the dedication what's your relationship like with him what makes him interesting maybe what makes him controversial what makes him such a central figure in history the first most importantly he's unique about seeing things through all the others eyes so if you were it's like there's a chess game i mean i think geopolit geopolitics is like a chess game but with multiple chess players playing the same game yes so imagine there are six people around playing the chess game and he could sit in each seat and he could know how they see it okay and see it in a calm way of how they see it he's unique in that way he's 98 years old and he's equally able to do that and he has a background that in which he's a historian so he really understands history super um he doesn't understand economic history as much so that's why to some extent we enjoy having a conversation because he's interested in the act and in the economic piece he doesn't know and i'm so interested in the geopolitical piece that i don't know as well but anyway he's able to do that but not only a historian but a practitioner so when you go from an academic to a practitioner who has that talent to see things through others eyes in an objective way and to be strategic rather than just tactical that's a very special person and that's why henry is uh to me a very special person yeah he's lived a fascinating life just all all of the world events he's been involved in is fascinating and like you said that's such an interesting skill to have to consider what are the concerns the hope the dreams the fears of the all the people at the table what are they thinking i find that people don't once again don't do that enough when it's the obvious thing you should be doing whether it's business deals or um political negotiation or geopolitical negotiation i'm often surprised again sorry to go to the russian thing because i i i hear sort of like i hear putin talk in russian and you start to infer certain intentions and like not the trivial stuff like the human being what is what is that human being hoping for himself for his country for his close in a circle for the bigger like and i i just see that that's often just lost in translation i just see like american leaders talking to putin and it's just not it's there's not a connection absolutely i know exactly what you're talking about you i it has never failed that in my listening to a conversation and or even reading a speech or and you see then it reported the inevitably the reporter picked some headline characterization that has very little to do with what was really happening but might be a headline grabber that's at some kind of distortion and there's a lack of understanding of really what's going on if it's okay let me ask you a couple questions about cryptocurrency uh you've had a few opinions about bitcoin over the years what are your thoughts about bitcoin today its role in the global financial system and just in human society in general well the evolution of bitcoin over the years is one of the things that has influenced changes in my view it has proven itself something like 10 11 years ago imagine the programming of this and here's the you throw it out and that's the idea it has not been hacked it has um um operated it is built it has come an amazing way um over that 11 years to be um maybe probably the most excited topic among a lot of people um and has been used and and is now um has obtained you know the status of having imputed value at the same time it is one of those assets that is an alternative money i think we're entering an era where um there's going to be a competition of monies um because of the printing of fiat money um and the depreciated value there will be a competition of monies um and bitcoin is part of that competition but there'll be many monies not just crypto monies but there'll be central bank crypto monies um but they'll be uh different kinds of monies um and even monies um are things that you buy and sell nfts can become a money uh a type of money you own it and it's an investment and you could say i'd rather own it than own uh bitcoin has ray dalia bought any nfts not yet okay um but um only only just because like i i definitely want to buy nfts to just experience them you know like i think think i should produce one yeah and i should uh i should have asked that have you made it have you minted an empty you probably should just to know what it's like yeah that's right this stuff is happening yeah this stuff is real okay and how it operates but like all new real things um some are gonna go and so i'm gonna you know it's like in the internet in the year 2000 um you know pets.com could have been a great but maybe pets.com doesn't make it and who knows that's the beauty of the competitive system that will evolve and some things will be treasured and some things will be uh trashed so um um but when i look at it um i think we are in an environment of you know what is an alternative money a money has two purposes a medium of exchange and a storehold of wealth and we are looking for and it's portable and you can and it's best if it's recognized in other countries um so gold is one of those so i look at it as an alternative gold but i look at a number of things as alternative gold um and i think that and i think and gold is still my favorite because of certain qualities for example um you can't trace it in in bitcoin you can trace who owns it where it's going and and so on governments can't have that ability to trace it and so on a gold piece of coin it's it's not connected i think not connected has benefits particularly in a world where maybe connections can be more risky um so and then also gold has been for many thousands of years universally recognized as a source of money and central banks it's the third largest uh source of money in central bank reserves and i don't think bitcoin is going to serve those types of purposes and so on so for various reasons i prefer gold to the other but it's a little bit part of my mix but then you look at it it hit i think 69 000 this year as the high bitcoin hit do you think it's possible you mentioned gold do you think it's possible it reaches very high numbers like 1 million some people talk about i don't i don't think that's possible because the way i look at it is there's a certain amount of um [Music] a certain amount of it and there's a certain amount of gold i'll use gold as a benchmark the amount of it is worth about five uh about one trillion dollars total cryptos about 2.2 trillion but let's say bitcoin uh it's one trillion dollars if you take the amount of money that is in um gold that is not used for jewelry purposes and not used by central banks and i assume bitcoin won't be used for jewelry purposes or central bank purposes um that amount in gold is about five trillion dollars so right now if you were to have a portfolio that has um gold and crypto um gold then bitcoin it's worth about 20 of the value of gold do i think it's going to be uh worth more than gold in terms of that mix i don't think it'll be worth more than gold but let's say it became worth as as much as gold i don't believe it will be i think that 20 sounds kind of about right i really don't know that what the right answer is um and then there's the question of what is all of that pool of money that let's say gold and gold equivalents relative to everything else does it go from you know let's call it six seven eight trillion to sixteen trillion maybe it could double it depends what it is in the world environment but basically if you use gold as a measure i um there's no it just makes no sense that it's going to be used um that much more am i sure about that i'm not sure about anything but logically it seems to me that there's a limitation on its price in relationship to other things that are like it let me ask for your deep financial analysis on a very important issue uh i've just talked a couple days ago the elon musk he wants to put a literal dogecoin on the moon uh what are your thoughts about deutsche coin uh and uh do you think he'll be the official currency maybe uh reserve currency on the moon and on mars my reaction is that's cute i remember elon when he first got he he first got his money from paypal i think he said to me it was he got 180 million dollars 90 million dollars he decided to say why aren't we going to outer space and he wanted to take a spaceship that would be modified using russian technology to put a um a plant and a watering can on the moon um or on mars i think it was um and and and he said first life on mars or first line as an inspiring uh notion and so then there's always what's behind it i have a lot of respect for elon's ability to do other things behind it uh and so i would take that as um symbolic and i'd be asking him what's behind it what's what's next and i'm also just on the topic of deutsche coin and meme coin and uh there's some aspect of humor and lightheartedness that's that's really interesting about the way we communicate what ideas become viral how to captivate people with ideas there's something about taking things too seriously that somehow slows it all down and it's interesting you're right that's part of human nature somehow so like humor is part of this whole thing you've uh talked about the importance of writing ideas down and uh you have principles in particular in principles and you have this really nice thing in your in your book we actually um i think there's such a brilliant way okay uh you have such a brilliant way of highlighting which parts are extra important and you make them bold that's a brilliant idea but let me just ask the high-level question of what's a good system for um taking notes well i find that almost everything happens over and over again um and we're in this the blizzard of these things happening and what i found is that if i'm making a decision that that after i make the decision usually or right at the time if i pause and reflect and i write my principle down in other words principle is sort of a recipe what would i use to how would i make that decision and what are the criteria around it i find that i make it much more clear it becomes clearer and it applies to the next thing that comes along it'll be that way because everything happens over and over and over again and i think people make the mistake of looking at just the one like it's the first one they have i don't know they have the first problem of this sort of the first child or whatever it is and this has been happening plenty of times and so if you have the principles i found that that helped me think more clearly about it and it helped me communicate better like why and so over the years over the last 30 years or so that's what i've done i did it originally to communicate very well with the people i work with um you know i set up my company and and i it was very important to have good communication and then we could debate the principles and so that's the process i urge people to do that there are many excellent decision makers um and i just wish that they wrote down their principles when this set so for example we talked about henry kissinger and his new book is going to come out with a book on leadership um and don't just describe the leaders describe then what about them were the essential elements to make a good leader under what circumstances and so if we think about that when then also then you begin to think in a principled way and then when you start to think in a principle way life becomes it's so much easier to make decisions and it's so much less confusing because it's like coming up on a species and you say okay well what species is it not just another it's a thing no what species is it and how do i deal with that species effectively and and so that's what that is and so i encourage people to write it down i wish anybody who's successful wrote down their principles or their recipes for making those types of decisions so the events of interest here happens over and over and over in similar ways as you're looking for the patterns and you're defining the process that's right to respond to those patterns and you call that the principles and that allows you to deal with the future effectively so like that codifies the lessons from the past to be able to deal with the future what advice do you have for young folks today in high school in college thinking about how to live uh have a career they can be proud of or maybe have a life they can be proud of know yourself follow your passion make your work and passion the same thing while considering the money part because money will get you freedom and choice and be able to make that but if you know yourself feel the pull um and um and pursue that passion um and along those lines by the way i found um that using personality profile tests has been very helpful i've used those for about 25 years for people to help to understand themselves and understand each other so i created a free one that is called principles you it's online it's had remarkable loving people who've taken it learn about themselves but also you can put in somebody else and it'll tell you about your relationship with them that's like 30 minutes is a quick discovery but the main thing is to understand on your journey your hero's journey when you're um that you will have uh mistakes and you will have weaknesses and to understand those not fight those because by understanding mistakes you will learn not to make mistakes again i have a principle which is pain plus reflection equals progress and so that reflection is important to know yourself know your pulls know your weaknesses and when you also know your weaknesses and the strengths of other people there are people who um have strengths where you're weak and you have strengths where they're weak and to be able to work well together is the most effective way of achieving uh success so yeah it's that journey and there's a life arc and there's a journey and you want to make it the best that you can make it and it has it's like a video game you know it has the challenges and the obstacles and the learning experiences and the temptations and all of that and the maximizing learning to go where you want to go to achieve the life you want is the most important that's kind of maybe a long-winded way of suing it but to learn i think i'll try to say it simply there's a five-step process step one is know your goals know what you're going after you could have almost anything you want but you can't have everything you want and so you have to prioritize and you move in that direction on the way to your goals you're going to encounter your problems and your obstacles so identifying step two is understanding your problems and your obstacles identify them step three is to diagnose them to get at the root cause of the problem and that could be many root causes but it could also be your weaknesses or weaknesses of others but you have to be objective about them once you diagnose them then you go to step four which is to design a way to get around them and then after you have that design you implement that design so you have to follow through and do it and you do that and and that will then produce its new results which should be better results i have i call this kind of the looping process it's the evolutionary looping process and um you do you just keep doing that and you learn over a period of time and you move in the direction that you want last question and you only have one minute to answer it you dedicate the book quote to my grandchildren and those of their generation who will be participants in the continuation of the story may the force of evolution be with you so let me ask where is this force of evolution taking human civilization and what in this story that evolution is writing gives you hope evolution isn't a direction toward improvement um and the greatest force is a man's capacity to adapt and invent and so you see in the charts in the book you see that um this upward movement life expectancy um uh health or all the things that we think are better you see the there's a chart and it shows that over a period of time and you barely see the downturns from depressions and wars in that that is the greatest power man's ability to invent and adapt is evolution and that's the greatest power and that is what gives me justifiable hope and a continuation of that like we mentioned with elon maybe we'll become a multi-planetary species so not only will we keep creating amazing things here on earth will keep expanding out into the cosmos my time horizon isn't doesn't have me analyzing that yet but i i i hope so and i uh agree that that would mean the nature so i'm not going to ask you for the best financial system on mars um i think we'll focus on earth for now right thank you so much for your brilliance for the for the books you've written for the works you've done for the inspiration from of millions so and thank you for spending your valuable time here with me today thank you thanks for listening to this conversation with ray dalia to support this podcast please check out our sponsors in the description and now let me leave you with some words from ray dalio himself every time you confront something painful you are at a potentially important juncture in your life you have the opportunity to choose healthy and painful truth or unhealthy but comfortable delusion thank you for listening and hope to see you next time

Channel: Lex Fridman

Views: 1,749,319

Keywords: agi, ai, ai podcast, artificial intelligence, artificial intelligence podcast, bitcoin, china, communism, cryptocurrency, democracy, economics, free market, lex ai, lex fridman, lex jre, lex mit, lex podcast, mit ai, ray dalio, russia, vladimir putin, xi jinping

Id: TISMidxdZoc

Length: 92min 38sec (5558 seconds)

Published: Sat Dec 25 2021

Reddit Comments

[u/dunnolol123]

Thank you for having Dalio on again! He's one of the only few people in finance I have respect for and his viewpoints on the world are incredible. Principles and his new book should be read by everyone.

Merry Christmas!

[u/Comprehensive-Hall82]

Have to say I was very disappointed in this podcast. And I say this as someone who loves lex’s podcast and ray Dalios first book. But there are clear hypocrisies and evidence of what saagar enjeti rightly calls “boomer brain” haha

First, Dalio talks about the critical importance of education but also says we need “bipartisan” consensus to make good policy moving forward as a country. But that assumes the 2 parties are acting in the interest of the American people and aren’t subject to institutional capture from financial interests, woke Twitter, etc. joe manchin is someone that I would be willing to bet ray dalio thinks would be perfect for creating “bipartisan consensus”. But how do you expect joe manchin to craft policy that’s good for the country (like prescription drug price reform or climate change) when he has taken millions of dollars from the pharmaceutical industry and part-owns a coal and fossil fuel company that pays him half a million dollars a year in dividends. Second, there is no acknowledgement of dalios clear conflict of interest in regards to China. He is not capable of having an honest conversation about China because any criticism would jeopardize his financial interests and his responsibility to his investors. Which is why he is happy to criticize the the USA but not China in the interview. For example, saying the USA is becoming more hostile and confrontational without pointing out the obvious fact that China is increasingly hostile over Taiwan and increasingly hostile diplomatically (using trade to punish countries that criticize them on human rights or just want an investigation into the origins of COVID-19). And he hilariously says that everyone is entitled to their culture and way of doing things, “so long as that doesn’t hurt anyone”. I guess Uyghur Muslims don’t count as people now.

I see in dalio a perfect example of the naive boomer mentality. He has no allegiance to the United States. No responsibility to the country that allowed people like him to be a pot-smoking hippie one day and then make billions in the financial industry, assisted by rigged game of “financial regulation” in America the last 40 years. He was happy to facilitate the rise of the CCP because understanding and economic cooperation is the key to political reformation and the expansion of human rights in China (and he was able to make a couple bucks on the side for his purely noble efforts). It’s amazing how none of the internal conflict ray dalio is so worried about has nothing to do with the outsourcing of manufacturing to China, the destruction of the working class, and the political corruption of the “bipartisan moderates” dalio loves so much.

“It is difficult to get a man to understand something when his salary depends upon his not understanding it.” -Upton Sinclair

[u/BeardontheYak]

I was having a hard time with how he kept saying ummmmm. Also don't think he's going to say anything bad about a country he has invested interest in.

[u/RockmanBFB]

I know lex has a hard time challenging guests and that's honestly understandable. Confrontation is not for everyone.

That's why I firmly believe guests like ray just shouldn't be on his podcast. What ray is spouting here at times is just pure propaganda for an autocratic regime that is currently involved in a Holocaust. Hearing him saying unchallenged that Xi is so smart he's done so well, Taiwan belongs to China and the hundred years of humiliation and on and on and on... Made me sick.

Either do not invite people who are compromised by China anymore or better yet, have Michael Malice on as a Co host to properly grill them.

[u/mojambowhatisthescen]

Will listen later today. But while knowing that Lex isn’t the sort to challenge his guests on controversial topics, I really hope he at least asked Ray about his dodgy stance on China’s atrocities.

[u/Jimger_1983]

I enjoy Dalio's perspectives but wish he had the courage to be more critical of China. I also found the conversation slow at times.

Peter Schiff would be great guest for Lex. He'd be good for a three hour episode and I think Lex's technical background and curiosity would make a great conversation with Peter over cryptocurrencies. Aside from discussing other economic issues.

[u/DrunkPacifist]

It was really sad to hear Ray calling Putin a "strong leader". The term that in my mind could have been associated with someone like Ronald Reagan or Lee Kuan Yew, has been devalued to the equivalent of "thief, thug, liar, and war criminal"

[u/FlahulachBoy]

Enjoyed that. Have Rays new book. He should’ve pushed Ray for his stance on the Uighur suppression in their concentration camps. Deplorable actions and shouldn’t be pigeoned into ‘it’s their country and leave ‘em at it’

Weak

[u/Morbo_Doooooom]

Some interesting takes, however I often find people who are connected financially to China often use the same kind of ambiguous language.

The fact is China is quickly looking alot closer to cult of personality around Xi, his anti corruption reforms really seemed to be just a consolidation of power, everything nice read about China seemed to suggest they had more of a local corruption issue yet the "reforms" really didn't target that. Throw in their oppression of Hong Kong, Tibet, the Uygers, and their recent fascination with producing more "manly" men, kind of brings Hitler/Stalin. They also an aging demographic that's really skewed towards men due to their disaster one child policy. None of it's good most likely means they'll eat nationalism up and become more aggressive. Also since wages are rising like all countries they're going to have to deal with an ever increasing unsatisfied public.

Throw in the fact all developed countries are going to be facing struggles with lack of recourses and disrupted supply chains especially as the world reorients after covid and has to deal with a worsening climate. (There's actually a public report from the CIA that warns public dissatisfaction is going to be an issue in all countries)

Some dark times ahead for geopolitics.

On a side note I'm actually pretty hopeful for the US I don't think it's nearly as bad as people make it out to be, considering that you don't have to go to far back to see a way worse political environment in the US. I do think doomers are exploiting the algorithms inorder to make a buck.

In any case the 2020s are shaping up to be an interesting decade.