Ray Dalio’s The Changing World Order is an important book as the world undergoes fundamental changes economically, militarily, technologically, and geopolitically.
The book is filled with countless useful graphics, so presented below are all of them.
It’s also a great overall read in physical copy, which you can grab at a great price on Amazon.
Table of Contents
CHAPTER 1: THE BIG CYCLE IN A TINY NUTSHELL
CHAPTER 2: THE DETERMINANTS
CHAPTER 3: THE BIG CYCLE OF MONEY, CREDIT, DEBT, AND ECONOMIC ACTIVITY
CHAPTER 4: THE CHANGING VALUE OF MONEY
CHAPTER 5: THE BIG CYCLE OF INTERNAL ORDER AND DISORDER
CHAPTER 6: THE BIG CYCLE OF EXTERNAL ORDER AND DISORDER
CHAPTER 7: INVESTING IN LIGHT OF THE BIG CYCLE
For China and Russia, bond data pre-1950 is modeled using hard currency bond returns held as though hedged back to local currency by a domestic investor; stocks and bonds modeled as full default at time of revolution. Annualized returns assume a full 10-year period even if markets closed during the decade.
Cases of poor asset returns in smaller countries such as Belgium, Greece, New Zealand, Norway, Sweden, Switzerland, and across the emerg- ing world are excluded from this table. Note that for conciseness the worst 20-year window is shown for each country/time period (i.e., including Germany in 1903–23 precludes including Germany from 1915–35). For our 60/40 portfolios, we assumed monthly rebalancing across the 20-year window.
While this diagram is not exhaustive, I include instances where I could find clear evidence of each occurring in the 20-year period. For this analysis, wealth confiscation was defined as extensive seizure of private assets, including large-scale forced, non-economic sales by a government (or revolutionaries in the case of revolution). Relevant capital controls were defined as meaningful restrictions on investors moving their money to and from other countries and assets (although this does not include targeted measures directed only at single countries, such as sanctions).
Tax impact for 401(k) method applies a 26 percent income tax rate (effective average federal tax rate for top quintile from the Congressional Budget Office as of 2017) at the conclusion of each 20-year investment period (i.e., tax-free investment growth). Tax impact for brokerage method separately taxes dividends (at the same 26 percent income tax rate) and capital gains, paying taxes on all capital gains (at a 20 percent rate) from both principal and dividend reinvestment at the conclusion of each 20-year investment period and netting losses against any gains.
CHAPTER 8: THE LAST 500 YEARS IN A TINY NUTSHELL
CHAPTER 9: THE BIG CYCLE RISE AND DECLINE OF THE DUTCH EMPIRE AND THE GUILDER
CHAPTER 10: THE BIG CYCLE RISE AND DECLINE OF THE BRITISH EMPIRE AND THE POUND
CHAPTER 11: THE BIG CYCLE RISE AND DECLINE OF THE UNITED STATES AND THE DOLLAR
CHAPTER 12: THE BIG CYCLE RISE OF CHINA AND THE RENMINBI
CHAPTER 13: US-CHINA RELATIONS AND WARS
CHAPTER 14: THE FUTURE
APPENDIX: COMPUTER ANALYSIS OF THE CONDITIONS OF, AND PROSPECTS FOR, THE WORLD’S LEADING COUNTRIES