It is with great pain that I am sharing with you that my 42 year old son was killed in a car crash yesterday. My family and I are mourning and processing and would prefer to be incommunicado for the time being.

Now that the budget bill has passed Congress, we can see what the projections look like for deficits, government debt, and debt service expenses. In brief, the bill is expected to lead to spending of about $7 trillion a year with inflows of about $5 trillion a year, so the debt, which is now about 6x of the money taken in, 100 percent of GDP, and about $230,000 per American family, will rise over ten years to about 7.5x the money taken in, 130 percent of GDP, and $425,000 per family. That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments), which will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases, or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels. This printing and devaluing is not good for those holding bonds as a storehold of wealth, and what’s bad for bonds and US credit markets is bad for everyone because the US Treasury market is the backbone of all capital markets, which are the backbones of our economic and social conditions. Unless this path is soon rectified to bring the budget deficit from roughly 7% of GDP to about 3% by making adjustments to spending, taxes, and interest rates, big, painful disruptions will likely occur.

"I promise to not raise your taxes" and "I promise to not cut your benefits" are the two popular political promises that are inconsistent with the much more needed promise "I promise to cut the budget deficit to about 3 percent of GDP" that is required to prevent a big debt/dollar crisis. There is no way that the deficit/debt bomb problem can be sustainably dealt with unless there is a mix of tax revenue increases and spending decreases that are determined in a bipartisan way. Our representatives in Washington, DC, both Republicans and Democrats, know this is true. They understand the need to reduce the deficit by having those from both sides chip in a bit (e.g., a 4 percent increase in tax revenue and a 4 percent spending cut) which would lead to a supply/demand balance improvement for US debt which in turn would lower interest rates. Lower interest rates would help reduce the budget deficit as well as help the markets and the economy. But because politics have become so absolutist, they feel they can't go down this obviously best path because both their constituents and their parties will throw them out of office if they explored this more balanced approach. To me, that’s a tragedy.

In my opinion, Indian’s Prime Minister Modi is one of the best, if not the best, leaders in the world. I had an opportunity to explore with him how he thinks as well as what he thinks. If you’re interested in listening to it, here it is: piped.video/watch?v=hFk7CeuN…

History shows us that when great empires fall, they generally fall for similar reasons. (1/3)

Thanks for the correction, @elonmusk. It’s great that we can have a good exchange about such economic things. When I said Chinese manufacturing production is greater than that of the US, Europe, and Japan, I meant to say that it is greater than the US, Germany, and Japan combined. (I was talking too fast and was a bit sloppy.) But the numbers in Grok are right and still striking, so the point remains the same, which is that China is the dominant player in global manufacturing. Your numbers and my numbers both show that China manufactures ~30%, the US manufactures ~15%, Germany manufactures ~5%, and Japan manufactures ~6% (total of ~26% vs. China’s 30%). If you adjusted these numbers to reflect that the Chinese typically sell comparable items cheaper, the magnitude of Chinese manufacturing would be even more striking. (By the way, I thought Grok’s answer and analysis on this were great.) While we’re exchanging thoughts, I think that if we don’t get the US budget deficit down to about 3% of GDP, there will be too much supply of US bonds relative to the demand for them, which will produce real problems. What do you think? Here’s my more in depth view: bit.ly/41vCSQ0

Today is a very special day for me and Bridgewater Associates because I transitioned my control of Bridgewater to the next generation and I feel great about the people and "machine" now in control. This transition moment is the culmination of a 47-year journey (1/11)

I am pleased to be able to help PM Modi as he is a man whose time has come when India’s time has also come. He and India are in an analogous position to Deng Xiaoping and China in the early 1980s--i.e., at the brink of the fastest growth rates and biggest transformations in the world. Additionally, the challenges both between and within China and the US are putting PM Modi in a unique position to influence the complexion of the world order via influencing the non-aligned world 's dealings with these two leading world powers. I believe that Modi has what it takes to have the greatest impact on the largest number of people in the world at a time that the risks of harmful impact are greater than at any time in our lifetimes.

In order to understand the full picture of how the world order is changing, I would urge you to watch this five-minute clip, or the complete 40-minute animated video called "Principles for Dealing with Changing World Order." And if you want an even more complete explanation, you can check out my book of the same title. #principles #politics #economics

India's successful lunar mission (landing its Chandrayaan-3 spacecraft on the moon) is another one of many straws in the wind showing its ascendence. As previously shown in my health index for countries, which is used to derive my projections for countries' next 10-year growth rates, India scores on top with a projected growth rate over the next 10 years of about 7%. It has the right mix of ingredients that shows that it has great potential and the right leadership to catalyze it. It reminds me a lot of China in 1984 (when I first went) around the time Deng Xiaoping made his reform and opening up policies that catalyzed China. Congratulations India!

When an empire runs out of its own money, it is able to increase the supply of money. However, printing more money causes borrowing to increase creating a financial bubble. I urge you to watch “The Changing World Order” on my YouTube channel to understand how, and what it means for all of us. #principles #raydalio

I am writing this to clarify what I think of Bitcoin. linkedin.com/pulse/what-i-re…

After spending time in Washington, DC discussing the budget deficit with senior people on both sides of the aisle, it’s clear to me that we are unlikely to change the debt trajectory we’re on and avoid the painful consequences. While virtually everyone agrees on the need to address our debt problem in a balanced way that includes tax increases and cuts to benefits, they also agree that they cannot speak up because politics have become absolutist. We must find a solution around absolutist pledges like, ”I will not raise taxes,” or “I will not reduce benefits,” when they are desperately needed.

In 1971 when I was a young clerk on the floor of the New York Stock Exchange, the United States ran out of money and defaulted on its debts. That's right, the US ran out of money. (1/6)

History shows us that having too much debt during an economic downturn leads to a classic, self-reinforcing cycle where: 1) The empire can no longer borrow the money to repay its debts 2) It prints a lot of new money, which devalues the currency and raises inflation 3) Living standards decline, leading to the rise of political extremism 4) Turbulent economic conditions undermine productivity and there is conflict about how to divide the shrinking resources 5) Populist leaders emerge pledging to take control and bring about order

If conflicts with internal or external opponents become severe, laws and punishments targeting the opposition will be imposed. For a picture of where we are headed and what we should do, you can pre-order my new book, How Countries Go Broke: The Big Cycle, here: amzn.to/4kkZJV4 #howcountriesgobroke #principles

We know that the terrible pain we are feeling has been and continues to be felt by so many others so our sympathies go out to them. May God be with you and may you cherish your blessings, especially at this time of year.

I probably would have fired the head of the Bureau of Labor Statistics too. That's because its process for making estimates is obviously obsolete and error-prone, and there is no good plan in the works for fixing it. The huge revisions in Friday’s employment numbers are symptomatic of this, especially because the revisions brought the numbers toward private estimates that were in fact much better. I assure you that this is something that I know a lot about because of how I use data to follow the economy and bet on where it's going. Of course, if the way most people in the media are in conveying President Trump’s motivation for the firing is correct —such as The New York Times saying "When President Trump didn’t like the weak jobs numbers that were released on Friday, he fired the person responsible for producing them"—that would be a big problem because leaders manipulating numbers that distort the truth to suit their political objectives is a classic sign of the loss of a functioning system with rule of law and checks and balance, and the loss of these things leads to the loss of confidence that underpins our whole economic and political system. So, it would be good if President Trump made his thinking clear. In any case, we do need big renovations to the ways the government estimates what's going on in the economy to make them more, not less, accurate.

For reasons explained at length in my book & briefly in this new animated video, the world order is changing in ways that haven't happened in our lifetime before but have happened many times in history and I want to I convey that picture to you. piped.video/xguam0TKMw8 (1/3)

Re the U.S. debt downgrade, you should know that credit ratings understate credit risks because they only rate the risk of the government not paying its debt. They don't include the greater risk that the countries in debt will print money to pay their debts thus causing holders of the bonds to suffer losses from the decreased value of the money they're getting (rather than from the decreased quantity of money they're getting). Said differently, for those who care about the value of their money, the risks for U.S. government debt are greater than the rating agencies are conveying. #principles #howcountriesgobroke #debt

In 1971, the US ran out of money and defaulted on its debts. Now, they didn’t say it that way. But by moving away from the gold standard, money as we understood it ended. I expected the stock market to plunge, but it went on to rise nearly 25%. That surprised me. But when I looked into it, I discovered the exact same thing happened in 1933 and it had the exact same effect. Here’s why.

As we come into graduation season, I’ve distilled my 600-page book into a 30-minute ultra mini-adventure series called “Principles for Success” to make it easy for people to get the key ideas. If you're interested you can watch them here: principles.com/principles-fo…

At the moment, a huge amount of attention is rightly being paid to the newly announced tariffs and their significant impacts on markets and economies. But very little attention is being paid to the circumstances that caused them—and to the even bigger disruptions likely still ahead. Don’t get me wrong: these tariff announcements are important developments. But most people are overlooking the much larger forces that are driving just about everything, including the tariffs. In my latest article, I discuss what I believe is far more important to keep in mind: we’re witnessing a classic breakdown of the major monetary, political, and geopolitical orders. This kind of breakdown happens only once in a lifetime—but it has happened many times in history, when similarly unsustainable conditions were in place. #principles #politics #economics

My view is that buying and holding real estate is not an effective investment strategy in our current economic environment, for a few reasons. 1) Real estate is more interest rate sensitive than it is inflation sensitive, so given our current circumstances it is likely to go down in real terms 2) It is a fixed asset that is easy to tax, which limits its impacts on your ability to diversify 3) Real estate is nailed down, so investing in it makes it more difficult to move money from one place to another That’s my view, in a nutshell. I’m curious to hear if you agree. #GovernmentDebt #debt #principles

History shows us that having too much debt during an economic downturn leads to a classic, self-reinforcing cycle where: 1) The empire can no longer borrow the money to repay its debts 2) It prints a lot of new money, which devalues the currency and raises inflation 3) Living standards decline, leading to the rise of political extremism 4) Turbulent economic conditions undermine productivity and there is conflict about how to divide the shrinking resources 5) Populist leaders emerge pledging to take control and bring about order

History shows us that having too much debt during an economic downturn leads to a classic, self-reinforcing cycle where: 1) The empire can no longer borrow the money to repay its debts 2) It prints a lot of new money, which devalues the currency and raises inflation 3) Living standards decline, leading to the rise of political extremism 4) Turbulent economic conditions undermine productivity and there is conflict about how to divide the shrinking resources 5) Populist leaders emerge pledging to take control and bring about order #principles #raydalio #history #debt

As John Maynard Keynes is credited with saying: “When the facts change, I change my mind. What do you do, sir?” Along these lines, the facts have changed and I’ve changed my mind about cash as an asset: I no longer think cash is trash. (1/2)

What’s now happening with money and credit has never happened in our lifetime before, but has happened many times before that. I want to give you that historical perspective. It’s coming in the next edition in my series “The Changing World Order”.

Do you get that the monetary order, the domestic order, and the world order are breaking down? Do you understand why and what that is likely to lead to? If not, I suggest that you read my last book or watch my video both titled "Principles for Dealing with the Changing World Order” or at least watch the 4-minute summary clip from the video here. I also cover how these orders are changing in my new book “How Countries Go Broke: The Big Cycle." I’m not asking you to believe anything: I am suggesting that you consider the reasoning that I laid out in these and decide for yourself what’s true and what you want to do about it.

@taylorswift13 for President! I just saw her at her concert in Singapore and realized that she can bring together Americans and people in most countries much better than either of the candidates, and that bringing people together is the most important thing. Watching this concert with people from all over the world made me and them feel good and connected and reminded me how powerful that universal culture is. Wouldn’t it be great if we had two candidates who could lead that culture and make smart leadership decisions too?

My below piece “The World Has Gone Mad and the System is Broken” explains some of the crazy things that are happening, why they are happening and why I believe that they are unsustainable. I’d be interested in knowing what you think about them. bit.ly/RD11_5

My family and I wish we could personally thank each and everyone one of you who shared your caring and condolences for our loss. While I knew about the power of love I had no idea what a healing effect it would have. (1/4)

In 1971, the US ran out of money and defaulted on its debts. Now, they didn’t say it that way. But by moving away from the gold standard, money as we understood it ended. I expected the stock market to plunge, but it went on to rise nearly 25%. That surprised me. But when I looked into it, I discovered the exact same thing happened in 1933 and it had the exact same effect. Here’s why. #principles #raydalio #history #economics

I wish Merry Christmas to those of you who celebrate it and happy holidays to those of you who do not. I wish you all peace, empathy, wisdom, and joy.

Ask me anything. I really value our interactions on social media which have changed a lot over time. It’s been a while since I’ve done an AMA so I thought I’d do one with this post. Ask me anything in the replies and I will answer as many as I can in the coming days.

Investors and Policymakers: Heed the Lesson Of the UK's Fiscal Blunder. (1/5)

I believe that the Russian-Ukrainian war is just the first battle in a long war for control of the world order. It is very important because it will tell us how powerful the sides are in a number of ways and how the sides are lining up. (1/2)

If you’re interested in learning what I’m offering you about principles and how the world is unfolding in light of them, you can find out here: linkedin.com/pulse/what-i-ha…

The Consequences of Liberation Day Following up on my post below from earlier this week, now that we see yesterday's tariff announcements, it appears to me that the first order consequences of them will be significantly stagflationary in the U.S. and significantly deflationary/recessionary in sanctioned countries. As for the second order consequences, we will see other countries' responses, significant policy changes in all countries to try to negate these undesired effects with policy tools at their disposal (most importantly via their monetary and fiscal policies). I also think negotiations and changes in what the U.S. policies will end up being will come as second order consequences. For example, we have seen reciprocal tariffs by China (which if enacted and followed by other countries will have huge effects), and, as I mentioned in my earlier article, I can imagine negotiations taking place over a China-U.S. deal to strengthen China’s RMB relative to the USD in exchange for some trade relief. If that were to happen, it would be more deflationary and depressing for China, which in turn would need to lead to an easier monetary and/or fiscal policy in China. You get the picture. We have in store many big surprises and changes ahead. To reiterate what is clear in any case and should be kept in mind is that… …1) the production, trade, and capital imbalances (most importantly the debts) must come down one way or another, because they are dangerously unsustainable for monetary, economic, and geopolitical reasons (so the current monetary, economic, and geopolitical orders must change in big ways)… …2) they will likely come with abrupt, unconventional changes (like those I describe in my new book How Countries Go Broke: The Big Cycle) and… …3) the longer term monetary, political, and geopolitical effects will depend mostly on the trust in the quality of the debt and capital markets as a safe store-hold of wealth, countries' productivity levels, and the political systems that make countries attractive places to live, work, and invest. Speaking of balance, I hope that your portfolio is balanced in the ways that I won’t digress deeply into here but have described previously in my books (i.e., across asset classes and geographies in an uncorrelated way and informed by which assets do well in different inflationary and growth environments). Expect the ride ahead to produce some very big tests and shakeouts that will be great tests of investors’ skills as the critically important monetary, domestic political, and international geopolitical orders are breaking down. Frankly, I look forward to this challenge as it is during such challenging times in the game that the opportunities make a big difference and distinguish oneself are the greatest. The views expressed in this article are mine and not necessarily Bridgewater’s.

Right on, Elon! It’s so obviously correct that we should be assessing what is true on the basis of evidence, yet most people don’t. Research has shown that they start with their conclusion and pick the evidence to fit it. That makes us live in a dangerously delusional world.

This is a great time for all involved to reconsider their approaches!  There are better and worse ways of handling our problems with unsustainable debt and imbalances, and President Trump's decision to step back from a worse way and negotiate how to deal with these imbalances is a much better way. I hope and expect that he will do the same with the Chinese, which I believe includes negotiating a deal that appreciates the RMB against the dollar, achieved by the Chinese selling dollar assets while also easing their fiscal and monetary policies to stimulate their demand. This would be a win-win. The Chinese should then restructure and monetize their excessive local government debts to get their debt overhang behind them. One way or another, there will have to be major changes to the debt/monetary orders to deal with the debt, trade, and capital imbalances problem. The next Trump administration move should be to deal with the deficit well by cutting the deficit to 3pct of GDP, which I described how I'd do without disruption in How Countries Go Broke: the Big Cycle, which you can read here: lnkd.in/eHMfZ4Ex. This is also a great time for investors who were shocked and terrified by what happened (and what might happen) to reconsider their approaches to structuring their portfolios so they don't have such intolerable risks.  I can guarantee that another worse case of the market moves that terrified them will come along eventually. While I can't squeeze in an explanation of how to structure a portfolio here, I can direct those who are interested to the Dalio Market Principles course that the Singapore government-founded Wealth Management Institute created to help educate investors: wmi.edu.sg/dmp-online. I'm also working on my next book, Investment and Economic Principles, which I will share parts of online as I write it.

We are in a period of great conflicts and disruptive changes that are important to understand well. Look at the news and the changes happening in front of your eyes.  It should be clear that the monetary order, the domestic political order, and the international geopolitical order are all breaking down and that we are on the brink of big disruptive changes. I urge you to understand what to expect by understanding how these things happen.  If you haven't seen my free 30-minute animation, “Principles for Dealing with the Changing World Order” (or this shorter 4-minute version), I recommend that you watch at least one of them to understand the timeless and universal cause-effect relationships behind these changes. Or, if you want a deeper understanding, you can read my book of the same title.

The level of debt our country faces is unprecedented in all of history. If we don’t effectively deal with it — and soon — our system will experience a financial heart attack. It all comes down to the numbers. The US currently pays about a trillion dollars a year on interest rates. And over the next year, we’re going to have to pay back and roll forward over nine trillion dollars of debt. This squeeze on spending simply isn’t sustainable. If spending continues at its current rate, a supply-demand issue is inevitable. The good news is that this problem is manageable, so long as we act now. You can read my thoughts on what we should do about it in my new study, How Countries Go Broke here: nitter.app/RayDalio/status/190495…

As you know, my family and I lost our beloved son Devon and I really appreciate the kindness and wisdom that have been expressed in your messages. It is now 13 days since Devon’s passing. Over that time, I went through a journey that I’m still on. (1/2)

Happy Diwali!

Jim Simons was the greatest—an unbelievably great investor, philanthropist, and man of character. I and all who knew him will miss him.

In 10 years, the US government will be $55-60 trillion in debt (which will be 7-7.5 times government revenue) because there will be $25-30 trillion of additional borrowing. That amounts to about $425,000 of debt per American family. When I calculate the supply and demand for this debt, I don’t see enough buyers to buy the debt the US needs to sell, which will cause big problems. We can avoid the worst-case scenario, but we need to act now. To learn more, I encourage you to read my new book, How Countries Go Broke: The Big Cycle. #raydalio #principles #economics #debt

History tells us the preferred path for government policymakers trying to deal with too much debt is lowering interest rates and devaluing the currency the debt is denominated in. Doing this is a very hidden way of reducing wealth, because as your currency goes down, it makes it look like other things are going up. But despite the downsides, this wealth shrinkage and reduction in buying power is favored by policy makers precisely because its impacts are less obvious than the alternatives. At such times, you should expect interest rates and the currency’s value to fall.

While I have been explaining for some time my thinking about gold (I like it) and debt assets (I don't like them) as storeholds of wealth in the context of how the world order is changing, now that gold is hotter than AI stocks (and the meme is now changing to recognize that it can be an even better storehold of wealth than tech stocks), I'm getting lots of questions about it. If you have questions for me, please ask them in the comments and I'll do my best to answer them here.  I'm using the questions I get and my answers to them to educate my AI clone, so it's helpful to know what questions people have.

Just back from Burning Man. Reminds me of Woodstock with better art (installations) and less good music. What a great vibe and what amazing creativity! Photo is with my pal and coworker Jeff Taylor at his great music camp Root Society. If you go next year, 1-5am is best.

The bond market is the backbone of all markets. Paying attention to certain market actions can tell you a lot about the supply-demand picture, and whether it’s at risk of breaking down. You learn more about what this means for all of us in my new book, How Countries Go Broke: The Big Cycle, available for pre-order here: amzn.to/4kkZJV4 #principles #raydalio #howcountriesgobroke #bondmarket

I want to explain in a nutshell why the US debt situation is at a very dangerous inflection point. Put simply, the US is now spending 40% more than we’re taking in. This accumulation of debt service payments has spiraled over decades and is starting to squeeze away buying power. And if you run the numbers, there’s an imbalance between how much debt has to be sold, who the buyers are, and the likelihood of it all being bought. Together, these two influences are why I worry about suffering an economic heart attack in the near future.

As Carl Jung put it, "Man needs difficulties. They are necessary for health." Yet most people instinctually avoid pain. This is true whether we are talking about building the body (e.g., weight lifting) or the mind (e.g., frustration, mental struggle, embarrassment, shame)--and especially true when people confront the harsh reality of their own imperfections. #principleoftheday

I mourn Charlie Munger who is a man I admired greatly for his sound fundamental principles as well has his investment abilities.  We have lost a great man and a great role model.

As you know, I view major developments like last weekend’s shocking and horrible events in Israel as part of an unfolding story that reflects how the world order is changing in ways that are remarkably similar to the ways it has changed many times before. That is because the most important cause-effect relationships between events remain the same. In the posts I share on social media, I put major new developments in the context of the perspective that I gained by studying history in that way and by getting as much input as I can from many smart, informed people. In this latest post, I do that for the Israel-Hamas war: linkedin.com/pulse/another-s…

If you don’t mind being wrong on the way to being right you’ll learn a lot—and increase your effectiveness. But if you can’t tolerate being wrong, you won’t grow, you’ll make yourself and everyone around you miserable ...

The Wall Street Journal wrote an article that said “Bridgewater Bets Big on Market Drop.” It’s wrong. I want to make clear that we don’t have any such net bet that the stock market will fall.

How Countries Go Broke: The Big Cycle As you probably know by now, I'm in a stage of life that has led me to want to pass along previously undisclosed principles that helped me, rather than to keep them to myself. Over my more than 50 years of operating as a global macro investor and through my research, I discovered some timeless and universal cause/effect relationships that helped me successfully navigate what was likely to happen. These principles are not widely understood and have proven to be invaluable, so I think they can help a lot of people. I previously wrote two books, Principles for Navigating Big Debt Crises and Principles for Dealing with the Changing World Order, which describe the mechanics behind what happened and is now happening. I am about to put out How Countries Go Broke: The Big Cycle, which explains the mechanics behind big debt cycles and debt crises because these mechanics are especially important to understand now. If you want a copy of How Countries Go Broke: The Big Cycle, it's now available for pre-order at Amazon (bit.ly/4l1BlZQ), Barnes & Noble (bit.ly/4c3fTj2), and other booksellers. It has just gone to the printer and will be on sale June 3. I have also been sharing parts of it online which you can get for free here: bit.ly/4c57ATQ #howcountriesgobroke #principles

Don't assume that people are operating in your interest rather than their own. A higher percentage of the population than you might imagine will cheat if given the opportunity. When offered the choice of being fair with you or taking more for themselves, most people will take more for themselves. Even a tiny amount of cheating is intolerable, so your happiness and success will depend on your controls. I have repeatedly learned this lesson the hard way. #principleoftheday

There is no avoiding pain, especially if you're going after ambitious goals. Believe it or not, you are lucky to feel that kind of pain if you approach it correctly, because it is a signal that you need to find solutions so you can progress. If you can develop a reflexive reaction to psychic pain that causes you to reflect on it rather than avoid it, it will lead to your rapid learning/evolving. After seeing how much more effective it is to face the painful realities that are caused by your problems, mistakes, and weaknesses, I believe you won't want to operate any other way. It's just a matter of getting in the habit of doing it. Most people have a tough time reflecting when they are in pain and they pay attention to other things when the pain passes, so they miss out on the reflections that provide the lessons. If you can reflect well while you're in pain (which is probably too much to ask), great. But if you can remember to reflect after it passes, that's valuable too. (I created a Pain Button app to help people do this, which I describe in the appendix.) The challenges you face will test and strengthen you. If you're not failing, you're not pushing your limits, and if you're not pushing your limits, you're not maximizing your potential. Though this process of pushing your limits, of sometimes failing and sometimes breaking through--and deriving benefits from both your failures and your successes-- is not for everyone, if it is for you, it can be so thrilling that it becomes addictive. Life will inevitably bring you such moments, and it'll be up to you to decide whether you want to go back for more. If you choose to push through this often painful process of personal evolution, you will naturally "ascend" to higher and higher levels. As you climb above the blizzard of things that surrounds you, you will realize that they seem bigger than they really are when you are seeing them up close; that most things in life are just "another one of those." The higher you ascend, the more effective you become at working with reality to shape outcomes toward your goals. What once seemed impossibly complex becomes simple. #principleoftheday

Thank you all! I'm overwhelmed by the outpouring of congratulations and warm wishes arising from my turning over control of Bridgewater to my next generation partners and moving on to a new phase as a mentor, investor, and board member. (1/5)

In my 55 years as a global macro investor, I have seen, traded through, and studied many big debt crises (48 are covered in my book, “Principles for Navigating Big Debt Crises.”) It is that perspective that leads me to believe that China is at a fork in the road and can either: deal with its debt by beautiful engineering or deal with its debt crisis in a way that drags on. To me, this one in China looks like “another one of those” that can and should be treated in big, classic ways— but more is required. I go over this in my latest article. As always, I welcome your comments and suggestions. linkedin.com/pulse/beautiful…

A number of people have asked me to explain what’s now going on in the markets and economy. If you're interested, I share some of my thinking here: linkedin.com/pulse/help-put-…

This year, the US will run a deficit of about 7.5% of GDP. If we don’t cut that to 3% of GDP, we’re likely to face a significant debt crisis in the next few years. This is not an issue that can wait. We need to do these cutbacks and adjustments while things are relatively good, otherwise the debt will continue to accumulate and the problem will get worse. Policymakers and politicians must work together to recognize the reality we face and take steps to address it, and soon. I lay out the framework and calculations underlying my thinking in my new book, How Countries Go Broke. I look forward to stress testing my perspective with all of you so together we can identify the best path forward. #principles #howcountriesgobroke #economics #Geopolitics

Since my son’s passing about six weeks ago, I have been on a journey and had reflection that put me in a much better place emotionally and intellectually. (1/3)

Starting today, in addition to sending out Principles of the Day for life and work, on some days I will mix in Principles of the Day for monitoring and dealing with the changing world order. I am doing this because the progression of the Big Cycle is reaching the point where watching it more closely is warranted. As you know, my approach for dealing with reality as it is unfolding is to study how it works and identify good principles for dealing with it. I build my understanding by studying many past cases, documenting how they worked, and then developing principles for dealing with them. Then I watch what is happening, reflecting on my frame of references from studying the past, and I use my principles and my thinking to make decisions. I also computerize my principles into decision rules and use the computer to collect the substantial amounts of data that reflects what is happening and converts that data into decisions based on my principles. I have found that most everything has happened repeatedly throughout history, so I view most everything as "another one of those.” I deal each “another one of those” in the way I just described. Of course, no case is exactly the same - as the saying goes "history rhymes" rather than repeats itself. In my book Principles for Dealing With the Changing World Order I provided detailed descriptions of how the world order has repeatedly changed and I provided a lot of principles for dealing with it. I described the five big forces that make up the Big Cycle (i.e, 1. the big cycle of money/credit/debt; 2. the big cycle of internal peace and conflict; 3. the big cycle of external peace and wars; 4. big acts of nature; and 5. big technology developments) and how they typically unfold and I provide many indicators that show which stage of each of these cycles, and, in turn, which stage of the Big Cycle, we are in. For example I describe why I believe that we are in stage 5 (on the brink of war) of the Big Cycle and what to look for to signal the slipping into stage 6 (war), which include things like "All-out wars typically occur when existential issues (ones that are so essential to the country’s existence that people are willing to fight and die for them) are at stake and they cannot be resolved by peaceful means” and “people dying in the fighting is the marker that almost certainly signifies the progression to the next and more violent state, which will continue until the winners and losers are clearly determined.” The wars that result from these conflicts between major powers make it clear which side gets its way and has supremacy in subsequent matters. I believe that by providing these perspectives and principles for watching the Big Cycle unfold, we can together watch how history rhymes so that we can deal with its changes better than if we didn't do this.

I believe that we are now living in a world in which sensationalistic headlines are what many writers want above all else, even if the facts don’t square w/ the headlines. You can believe me or you can believe The WSJ writer. I hope you have come to know that you can believe me.

I'm at a stage in life that has led me to want to share my insights and experiences, rather than keep them to myself. I’ve always found exchanges with my readers rewarding, and I wish I could do so more often. Over the last 35 years, I've written down nearly all my principles and criteria for making decisions. Now, thanks to rapid AI technology—and frankly, because it’s so cool—my AI team and I have developed Digital Ray. This tool allows me to speak with everyone who wishes to, for as long as they want, at any time. The first version of what I’m temporarily calling “Digital Ray” has been in beta testing for a few months now and is well-trained to converse about life and work as I would. If people allow it, it can also get to know them, making the conversations more personalized. That version had communications in text. This new version has been upgraded, allowing us to have voice conversations just like we would in a real conversation. You can use it any time, whether you’re exploring an idea, making a decision, or navigating a difficult situation, and wherever you are. Additionally, you can choose to have the audio transcribed and saved to your chat history after the conversation ends, allowing you to revisit it at any time. If you’re interested in joining this beta test, which I'm sure you will find interesting and I know will help me make this thing great, you can sign up below. For this beta round, we’re looking for individuals who will be active users of the tool and provide feedback. Sign up for the Digital Ray voice beta here: principles.com/AIBeta-signup

There is nothing more important than understanding how reality works and how to deal with it. The state of mind you bring to this process makes all the difference. I have found it helpful to think of my life as if it were a game in which each problem I face is a puzzle I need to solve. By solving the puzzle, I get a gem in the form of a principle that helps me avoid the same sort of problem in the future. Collecting these gems continually improves my decision making, so I am able to ascend to higher and higher levels of play in which the game gets harder and the stakes become ever greater. All sorts of emotions come to me while I am playing and those emotions can either help me or hurt me. If I can reconcile my emotions with my logic and only act when they are aligned, I make better decisions. Learning how reality works, visualizing the things I want to create, and then building them out is incredibly exciting to me. Stretching for big goals puts me in the position of failing and needing to learn and come up with new inventions in order to move forward. I find it exhilarating being caught up in the feedback loop of rapid learning--just as a surfer loves riding a wave, even though it sometimes leads to crashes. Don't get me wrong, I'm still scared of the crashes and I still find them painful. But I keep that pain in perspective, knowing that I will get through these setbacks and that most of my learning will come from reflecting on them. Just as long-distance runners push through pain to experience the pleasure of "runner's high," I have largely gotten past the pain of my mistake making and instead enjoy the pleasure that comes with learning from it. I believe that with practice you can change your habits and experience the same "mistake learner's high.” #principleoftheday

Looking around today, it’s pretty obvious the world is changing. To help me understand what was happening, I looked back at history and saw the same patterns happen again and again. I’m now releasing this study in a new #book, Principles for Dealing with the Changing World Order

In the last election he won a big mandate from voters for the next 5 years. I think he has a good chance of creating revolutionarily better outcomes with the broad support of the population. Those are big deals that are hard to find in other countries.

Most worry about whether their assets are going up or down in value; they rarely worry about whether their currency is going up or down. Think about it. (1/3)

History and logic have made clear that sanctions reduce the demand for fiat currencies and debts denominated in them and support gold. Throughout history, before and during shooting wars, there have been financial and economic wars that we now call sanctions (which means cutting opponents off from money and needed goods). When there is a debtor-creditor relationship between opponents, the debtor choosing to not pay the debt service owed to the opponent creditor country has the beneficial effects of hurting the opponent financially and reducing its own debt service burdens. But it also has the detrimental effects of weakening the sanctioning/debtor country's currency and the value of its debt. When this occurs with the world's leading power and its reserve currency, the global monetary order is inevitably weakened. As a result, the holding and price of gold rise, as it is a non-fiat currency that remains securely held and universally accepted. #principles #raydalio

This applies to everything: when you’re buying something, asking for advice, reading the newspaper, watching the news, etc. That is because most people (though not all people) are trying to sell you something that will help them get the things they want. If you can keep this question in mind, and get the answer to it, you will be able to see things from a higher level and make better decisions. And, if you can identify the people who are true friends or those who are truly trying to help you, especially the smart ones, you will have a much better life than if you don’t. #principleoftheday

I urge you to understand how and why the world order is changing so you can navigate it well. If you are watching what is happening, you are now seeing more fighting within countries, more fighting between countries, and more debt excesses than at any time since the 1930-45 period. The U.S., France, Japan, Germany, the U.K., Korea, Japan, China, Russia, the Middle East, and many more are plagued by these problems, and they are spreading. To understand why and where we are likely headed, I urge you to watch this 40-minute video at the link in my bio or read my book Principles for Dealing with the Changing World Order. Then we can exchange thoughts about what's happening here on social media.

I’m worried that the US government debt problem will get so bad that the US will “go broke” and I believe that there are steps we can take to prevent it. I am in the process of completing a comprehensive study about the mechanics of how countries go broke, where the US government is in its Big Debt Cycle, and what policymakers and investors should do about it. The study will be published later this year as a new book: How Countries Go Broke: Principles for Navigating the Big Debt Cycle, Where We Are Headed, and What We Should Do. As with my prior books, I am going to pass along parts of it for free as I am writing, and I'd like to discuss what it says with you and others on social media. You can read Part One here: nitter.app/RayDalio/status/187884…

Many of you have asked about how to deal with perceived setbacks, so I wanted to share some of the principles that have helped me in moments like this. #principleoftheday

I threw a lot at you in the last post. You might want to watch again slowly so you can see if the sequence makes sense to you. (1/8)

Almost every group that agrees on the big things ends up fighting about less important things and becoming enemies even though they should be bound by the big things. This phenomenon is called the narcissism of small differences. Take the Protestants and Catholics. Though both are followers of Christ, some of them have been fighting for hundreds of years, even though many of them are unable to articulate the differences that divide them, and most of those who can articulate the differences realize that they are insignificant relative to the big important things that should bind them together. I once saw a close family have an irrevocable blow-out at a Thanksgiving dinner over who would cut the turkey. Don't let this narcissism of small differences happen to you. Understand that nobody and nothing is perfect and that you are lucky to have by-andlarge excellent relationships. See the big picture. #principleoftheday

He is doing that by providing both basics and cutting edge digital technologies as part of his mission for India’s direction. For example his government built more than 100 million toilets which reduced diseases potentially saving approximately 300,000 lives by some estimates.

It is for those reasons that so many of the principles that will follow are about ways to avoid shooting wars.

Apparently, if you throw a frog into a pot of boiling water it will jump out immediately, but if you put it in room-temperature water and gradually bring it to a boil, it will stay in the pot until it dies. Whether or not that's true of frogs, I see something similar happen to managers all the time. People have a strong tendency to slowly get used to unacceptable things that would shock them if they saw them with fresh eyes. #principleoftheday

(continued) But I’m also wondering about the Principles of the Day, which I know many people respond to each day. Would you like me to continue sharing them as a break from the news of the day? Let me know by liking or replying to this.

Write Down Your Principles! The two most powerful practices that radically improved my life were meditation and writing down my principles. If you do these two things I guarantee you a much better life. (1/5)

The seeds of every great empire’s inevitable decline are embedded within the fruits of its successes. A predictable cycle of borrowing and spending occurs that boosts a great power’s spending power over the short-term and makes it appear very strong. But its finances are in fact being weakened. #principles #RayDalio #History #empire

After the US #election the world order is changing, and regardless of what side you are on, it’s changing in interesting ways. From my studying of history over the last 500 years there are 5 big forces that determine these changes. #principles #raydalio #mentor #politics

Media distortions are killing us and most people are reluctant to stand up against them because they are afraid that the media they are criticizing will destroy them. (1/5)