ระเบียบโลกใหม่ผ่านเลนส์ Ray Dalio #สรุปหนังสือ Changing World Order | Mission To The Moon EP.2712

People of my generation, or everyone listening now, were born and grew up during one of the longest periods of peace in human history. That is, the 80 years after World War II. Since we were born, we have only known peace. So, it's very easy for us to believe that, "Oh, the world is like this, it must be peaceful like this." But Ray Dalio says that in the perspective of 500 years of history, the period of our lives is an exception, not the rule.

The events of today are different from others because his perspective is different. Most people are shocked by what is happening because it has never happened in their lifetime. And because they are more interested in daily bad news than in the world's financial system, political order, or geopolitical order, and how it has evolved over time. But for him, watching the news today with wars and such is like watching a movie repeat many times, because the events are unfolding in a way that has happened repeatedly throughout history.

The lesson Ray Dalio learned is that the big things that shock us the most in life are often things that may not have happened in our lifetime, but have happened repeatedly throughout history. And this is the heart of this book.

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>> Hello, and welcome to the Mission to the Moon Podcast. You are with Rungtharn Utsaha. Today, we will discuss a book that I believe is very timely. This book is written by someone we already know, Ray Dalio. This is another book that, if I had the time to read it thoroughly, I would recommend you read. But if you don't, you can listen to this podcast. "The Changing World Order: Principles for Dealing with the Changing World Order: Nations Succeed and Fail." We know the world order is changing, but how is it changing? What was the background before that? [inhale sound] What will happen next? What does history teach us? How does "History repeats itself" repeat? This book will show you that it truly repeats.

But before diving into the book's content, I want to invite everyone to imagine the year 1971. August. Sunday night, August 15th of that year. Richard Nixon, the President of the United States, appeared on television to announce something that shook the global financial system. That is, the United States would no longer allow anyone to exchange dollars for gold. In simple terms, the promise America had made to the world since World War II, that one dollar would be backed by gold, was torn up that night.

The next Monday morning, a young man in his early 20s walked to work on the trading floor of the New York Stock Exchange. He was just a small clerk on the floor, but he was confident that after last night's announcement, the stock market would surely collapse. Right? It sounds logical. The dollar had just been devalued before everyone's eyes. Confidence was gone. Who would dare hold stocks?

But do you know what actually happened? The stock market didn't collapse. The Dow Jones Industrial Average actually rose 4% that day. And it became known as the "Nixon Rally." The young man stood there, bewildered in the middle of the trading floor, because what happened was the complete opposite of what he had predicted. That young man was Ray Dalio himself, who later became the founder of Bridgewater Associates, the world's largest hedge fund. And on that very day, Ray Dalio learned a lesson that changed his life forever.

He reflected that events like this had never happened in his life before. So, he couldn't understand it using only his own experience. But when he went back to study history, he discovered that a similar event had happened once before, in March 1933, when Franklin D. Roosevelt severed the link between the dollar and gold, and the stock market rose in exactly the same way.

The lesson Ray learned was that the big things that shock us the most in life are often things that may not have happened in our lifetime, but have happened repeatedly throughout history. And this is the heart of this book.

Today, we will take everyone on a deep dive into a book that I consider to be one of the most important books. I truly believe this book is important. "The Changing World Order," or "Principles for Dealing with the Changing World Order: Nations Succeed and Fail." It's a book that has sold millions of copies worldwide and hit the New York Times bestseller list. Of course, because this book came out after "Principles," another excellent book. But we won't stop at just the content of the book. Because this book was released in 2021, and since then, the world has been moving in ways that Ray Dalio wrote about, quite eerily. And Ray Dalio himself has spoken out and warned through the media frequently over the past year and this year. Issues like the US debt exceeding $38 trillion, that he believes we are approaching what he calls an economic heart attack, to world leaders announcing on stage at the Munich Security Conference in early 2026 that the old world order has died.

Since this will be very long, I want to provide a brief roadmap of what we will cover. We will start by understanding what the "Big Cycle" or the great cycle that Ray talks about is, and what drives it. Then, we will look at money and debt, which are the core of this topic. We will then travel back in time to examine three great empires: the Dutch, the British, and the Americans, and how each rose to power and fell. Next, we will discuss China, five types of wars between superpowers, and lessons from the 1930s, which Ray says are shockingly similar to today. And we will update what Ray Dalio has said publicly in 2025 and 2026, since the book was released in 2021. But I also invite you to listen to dissenting opinions, what those who disagree with Ray Dalio think. And we will conclude with the most important question: as working individuals, business owners, and small players in a changing world, what should we do?

I guarantee that if you haven't read this book, it's worth listening to. But I still encourage you to read it.

Alright, let's start with the most fundamental basis. Why does a fund manager write a 500-year history book? It's an interesting question. Because if you work in finance, you might not be very interested in 500 years of world history. But for Ray, it's about betting on the future. As a global macro investor, he has to correctly predict where the world economy is heading. And throughout his 50-plus-year career, he has found that almost all of his major mistakes have come from the same type of event: events that have never happened in his lifetime, like the morning of August 15, 1971, that I mentioned at the beginning. Therefore, his solution is that if our life experience is too short, we must borrow from history or the experience of companies. Ray and his team at Bridgewater have therefore studied the rise and fall of great powers over the past 500 years, from the Dutch, British, and Americans, and also looked back at many Chinese dynasties over hundreds of years. They have gathered all this data, put it together, and asked a single question: are there any patterns that repeat? The answer they got is yes, and it's so clear that they gave it a new name: "The Big Cycle."

Before I describe what this cycle looks like, I want to give credit to his working method. Because this is not a book written from mere speculation. Ray's team has built a database of real numbers going back hundreds of years, including trade statistics, asset prices, exchange rates, government fiscal statements, and even data on education and patents. They have created indices of national power that can be compared across time. In simple terms, he tried to do with history what he has done with financial markets throughout his life. For those who remember the book "Principles," you will recall that he is very serious about data, often called "crazy" about data. He converts stories into data and finds patterns from data, not from bias.

Of course, this method has limitations, which we will discuss later, as there are dissenting voices. But at least, it is an effort. I haven't read a history book like this before, at least not that I've seen. I don't know about other books. But it is one of the most systematic efforts I have ever seen. Ray also states in the book that what he proposes is a rough template to help see the big picture, not a precise clock. History does not repeat itself like a copy-paste. But it rhymes. It's not a copy, but it rhymes.

The world has found that empires or world powers in each cycle typically have a period of prosperity lasting around 250 years, plus or minus. The United States recently celebrated its 250th anniversary. During this period, there are typically turbulent transition phases of about 10-20 years. The orders that great powers create, whether financial, domestic political, or international, Ray wrote in his latest article in Fortune in March 2026, last for about 75 years, plus or minus 30 years.

Now, let's look at the numbers and count. The current world order was established in 1945 after World War II. Today, it's been 80 years, which is right in the zone Ray mentioned as the end of its lifespan. What drives this cycle? Ray Dalio summarizes that there are five major forces and five drivers. He explained this very clearly in an interview with "Meet the Press" on NBC in April 2025, stating that history is determined by these forces.

Force 1: The cycle of money and debt. Increasing debt, printing money, currency devaluation. This is the protagonist of the story, and we will delve into it.

Force 2: Internal conflicts within countries, especially the inequality between the rich and the poor, and the division of values and beliefs, leading to extreme politics.

Force 3: International conflicts, as old superpowers weaken and new superpowers rise to challenge them.

Force 4: Natural disasters, floods, epidemics. This may seem unrelated to the economy, but history has taught us many times that these are often the last straw that breaks an already fragile system.

Force 5: New technologies that transform production, warfare, and national wealth, from the steam engine to AI today.

What's important is that Ray Dalio says that all five forces are currently working simultaneously, which is something that rarely happens in history.

Now, if you ask how to measure which country is rising or falling, there are tools. He created eight indicators that can measure national power over hundreds of years. These eight are: 1. Education. 2. Innovation and technological capability. 3. Global competitiveness. 4. Economic output size. 5. Share of world trade. 6. Military power. 7. Strength of financial centers. 8. Status of the currency as the world's reserve currency.

And I think this is the most interesting part. It turns out that these eight indicators do not rise and fall together; they have an order. The indicator that always leads is education. Countries that are about to rise invest in the education of their people first. Good education leads to innovation. Innovation creates competitiveness. Competitiveness creates a share of world trade. Wealth from trade then builds a strong military and financial centers. The indicator that always lags the furthest is the status of the world's reserve currency. For a country's currency to be accepted and respected globally, that country has usually been great for some time. And the most surprising part is that this status is often the most enduring. Even when other aspects of greatness decline, the currency can remain for a while longer, like the light of a star that has died, but it takes time to reach our eyes. This is dangerous because it makes the declining superpower feel strong, when in reality, everything else has already collapsed.

When these eight indicators are plotted on a graph, Ray Dalio found that they form an inverted bell shape, similar to all empires. They peak and then decline. And the stories behind these graphs are eerily similar. He says the archetypal cycle, or the archetype, looks something like this: It begins after a major war or significant turmoil. The victor gains absolute power. The victor writes the rules and creates a new world order. In the early stages, people still remember the pain of war, so no one wants to fight. Everyone focuses on working. Countries invest in education, infrastructure, and capital markets. This is the period of long prosperity, peace, and flourishing wealth. But that success itself sows the seeds of problems. As prosperity lasts longer, people become complacent. They start to feel that tomorrow will be better than today, and it will always be better. People start to take risks, speculate. Debt grows faster than income. Bubbles begin to form. Meanwhile, the increasing wealth is not shared equally. The gap between the rich and the poor widens. Younger generations, who have never experienced the hardships of war, start to overspend. Countries begin to spend more on maintaining their imperial status, which becomes increasingly expensive. And one day, the bubble bursts. The accumulated debt comes due. The government cannot pay. So, they do what governments have always done: print money. Printing money devalues the currency, making things more expensive. Those who are already poor and struggling become even more so. Social anger erupts. Politics become polarized. Populism, both left and right, rises. And at the same time, rival powers quietly accumulate strength. During the period when the dominant power is enjoying its comfort, the new superpower accumulates strength until it is strong enough to challenge. Internal conflicts, combined with external conflicts, often end in war of some form. And a new victor writes new rules, and the cycle begins again. This is a movie that has been playing for 500 years, with different characters and scenes, but the plot is exactly the same.

Now, I want to expand on this archetypal cycle a bit more, because each phase has many hidden lessons. Let's start with the upward phase. What Ray Dalio sees consistently across all empires is that it begins with strong leadership and a disciplined society. Generations that have experienced hardship, that have gone through war, share a set of qualities: they are diligent, thrifty, saving, patient, prioritize their children's education, and importantly, feel that everyone is in the same boat. The gap between the rich and the poor during this period is narrow because everyone starts anew together. Such a society gradually builds a chain reaction: better education leads to innovation and technology, which leads to global competitiveness. Trade income then flows back to build infrastructure and a strong military to protect trade routes. Financial centers emerge. And finally, the country's currency becomes trusted. The peak, it seems, is the best point, right? But in Ray Dalio's lens, the peak is where the seeds of decline have already been sown. The mechanism is very subtle. First, success makes things expensive. The wages of the leading country rise with the standard of living, making its products less competitive against emerging countries. Second, success can always be imitated. Follower countries don't need to waste time experimenting; they can copy the success at a lower cost. And third, the worst is that success changes the character of people. The third and fourth generations, born into wealth, no longer have the hunger of the pioneers. Ray calls this phenomenon "classic decline," where society shifts from hard work to pleasure-seeking, from saving to borrowing, from investing for the future to consuming today. Hearing this, it reminds me of the Chinese proverb: "The first generation builds, the second maintains, the third squanders." This pattern, [inhale sound] Ray Dalio says, based on 500 years of data, doesn't just happen to family businesses, but also to countries.

Now, let's move to the downward phase, which has a sequence of events that Ray says are almost predictable. It begins with the deterioration of the state's financial condition, with expenditures consistently exceeding income, accumulating debt. [inhale sound] Until creditors start to become suspicious. Then, when a crisis occurs, the state must choose between real pain today or printing money to postpone it and face the pain later. Almost all states choose the latter. And printing money silently erodes the wealth of the people. Those who are hit hardest are those with only salaries and savings, without assets. The gap widens further, anger accumulates. Politics become more extreme. Populist leaders from both sides gain more votes. And the country's ability to make difficult decisions together disappears. All of this happens simultaneously with external rivals who are accumulating strength. It's a storm gathering from all directions. There is a quote in an article published in Fortune this year that I think summarizes Ray's perspective well. He says that he sees today's events differently from others because his perspective is different. Most people are shocked by what is happening because it has never happened in their lifetime, and they are more interested in daily bad news than in the world's financial system, political order, or geopolitical order, and how it has evolved over time. But for him, watching today's news with wars and such is like watching a movie repeat many times, because the events are unfolding in a way that has happened repeatedly throughout history.

I like this comparison. I think it applies to our lives too. Sometimes, we only look at daily news and see the world as chaotic, random, good today, bad tomorrow. But if we step back and look at the picture over decades or centuries, we will see that the chaos has a rhythm. There is a piece of data that I find interesting. Ray created a graph of deaths from conflict in Europe going back to 1500. We found that there are three large waves, each lasting about 150 years, and each has the same structure. It begins with a long golden age, like the Renaissance, the Enlightenment, the Industrial Revolution. And that prosperity gradually breeds conflict until it explodes into [cough sound] devastating wars: the Thirty Years' War, the Napoleonic Wars, both World Wars. The conclusion Ray draws from this graph is that peace is not the normal state of the world. Peace is just one phase of the cycle. And this is what many people agree with, and I strongly agree: people of my generation, or everyone listening now, were born and grew up during one of the longest periods of peace in human history. That is, the 80 years after World War II. Since we were born, we have only known peace. So, it's very easy for us to believe that, "Oh, the world is like this, it must be peaceful like this." But Ray Dalio says that in the perspective of 500 years of history, the period of our lives is an exception, not the rule.

The point I think is the heart of this book, and indeed of Ray Dalio's other books, is that he always says the world economy is driven by one word: credit, or lending. For example, when I borrow money to buy something, the money I spend is the income of the seller. So, my borrowing today is equivalent to using my future purchasing power in advance. An economy where many people borrow will grow rapidly and be vibrant, and everyone will be happy. But there is always a repayment date. When it's time to pay back, purchasing power will be squeezed, and the economy will slow down. This is the short-term debt cycle we are familiar with, about 5-8 years per round. That's what we call the economic cycle. But the real driver is what Ray calls the long-term debt cycle, or the Big Cycle. Because in each round of the short cycle, debt is never completely cleared; it accumulates. Like plaque in arteries. At first, there's a little, it's okay. As you get older, it builds up until one day, the debt and interest burden grow beyond income, leaving less money for other expenses. When that point is reached, a country has only a few options, and all of them are painful. Option 1: austerity, cutting expenses. This is politically very painful, so almost no government wants to do it. Option 2: defaulting on debt or restructuring debt, which destroys confidence. Option 3: a major tax increase on the wealthy, which often ignites social conflict. And Option 4, which history shows is chosen most often because it is the quietest pain, is printing money and letting the currency depreciate. Because printing money has no receipt, people don't feel like they are being taxed, but it is actually a silent tax of sorts, affecting everyone who holds cash, bonds, savings, and salaries. And is there any other way to get off this debt mountain? Ray says yes, there is. In his study of debt crises, he calls this "beautiful deleveraging." It sounds romantic, doesn't it? But its real meaning is the art of combining the four things I just mentioned in the perfect proportion: a little austerity, some debt restructuring, a bit of tax increase, and enough money printing to support the economy without causing runaway inflation. If mixed correctly, the economy will gradually grow faster than debt without going through hardship. America after 2008 is an example that Ray Dalio says was done quite well. But there is one condition for this formula that people often overlook: it requires a political system that can still make difficult decisions in a timely manner. And this is what makes Ray Dalio particularly concerned about this cycle. Because the medicine is still there, but the patient is arguing among themselves and cannot take the medicine. He has a statistic from an interview late last year. According to his research, since 1750, about 80% of all currencies that have ever existed in the world have disappeared. They are gone. 80% are gone forever. And the remaining 20% have all been massively devalued. Imagine that the money we believe to be the most stable, the most tangible, is actually one of the most easily destroyed assets in the long game of history. That's why Ray said the famous phrase on stage in 2020: "Cash is trash." Normally, we say "Cash is king." But the meaning... if you say this phrase like this, it will be dramatic, but I must say that in Ray's context, it doesn't mean that.

He's not saying you shouldn't hold cash. Perhaps this phrase is a bit strong, let's put a disclaimer on it. But he means that holding large amounts of cash for a long time, thinking it will be safe forever, is a trap. The meaning is that it's not that you can't hold cash; you must hold it, otherwise you won't have anything to invest with. But inflation and money printing are eroding its value every day. This is the meaning of that dramatic phrase.

Now that we understand debt and money printing, let's move to another very important concept: the world's reserve currency. A reserve currency is the currency that countries around the world use to trade with each other and store national wealth. Today, that is the US dollar. Central banks worldwide hold US dollars and US Treasury bonds as reserves. They may hold other currencies too, but mostly US dollars. Oil, gold, all commodities are priced in US dollars. Being the owner of the world's reserve currency is what Ray Dalio calls the greatest economic privilege a nation can have. Think about it: other countries want it, so they have to give up oil, rice, sweat, and labor to exchange for dollars. But if America wants it, it just prints it. The world is happy to lend to America at low interest rates because they want to hold this currency. They can spend beyond their means because there are always people worldwide buying their bonds. Sounds good, right? But this is the hidden curse. Because that privilege tempts the owner of that currency to borrow excessively, to spend excessively, on domestic welfare and foreign military, until one day the debt becomes too large for creditors to believe they will be repaid in full. When creditors worldwide become uncertain, they start to sell bonds and switch to other assets. The reserve currency status, which was once a shield, becomes a death trap. Because the demand for that currency disappears, it means higher interest rates, a weaker currency, and a crisis that returns to haunt them in a cycle.

When we talk about debt cycles, we don't have to look as far as Europe. We ourselves have something that can teach us a good lesson: the Tom Yum Kung crisis. If we look at it through Ray Dalio's lens, it's a condensed version of the Big Debt Cycle. The period before the crisis, the Thai economy grew by 8-9% for many consecutive years, leading the world to call it the "Fifth Tiger of Asia." Confidence was overflowing. Everyone believed tomorrow would surely be better than today, so they borrowed to the fullest. And at that time, it was very dangerous because we borrowed in dollars, as interest rates were lower, with the confidence that the Thai baht, pegged to the dollar, would never change. At that time, it was pegged at 25 baht per dollar. The real estate bubble grew larger and larger, with buildings rising all over the city with no one to live in them. On July 2, 1997, reality came calling. The baht had to be floated. The baht weakened from 25 baht per US dollar to almost 50 baht. At that time, everyone's dollar holdings doubled overnight. Businesses collapsed like dominoes, massive unemployment, and the country had to enter an IMF program. [cough sound] The impact of 1997 is still present. And there are two points. The first point is that the mechanism Ray Dalio wrote about in the book is not just theory; it has happened in many countries, and we are one of them that has experienced it. The second point is, imagine that even a crisis in a small to medium-sized country like ours could shake all of Asia and affect many people. Our baht is not that large. Our country is not that big, but countries in Asia were severely impacted. We were hit by the ripple effect. Even with Thailand, imagine if this crisis happened to the owner of the world's reserve currency, the owner of the bond market that is the foundation of the entire global financial system. How much would it shake? This is what Ray is warning about, and it is not a distant issue for us at all. [inhale sound]

Ray Dalio has observed that in the past 500 years of history, there have been three major world reserve currencies: the Dutch Guilder, the British Pound, and the US Dollar. The first two have lost their status through very similar paths: the parent country accumulated massive debt, often from wars, and then its competitiveness declined, eventually leading to currency devaluation until the world stopped holding it. But there is a very insightful point here that I like very much. Ray Dalio says that when confidence in paper money collapses, people will always flee to the same thing throughout the past 500 years: gold. He says gold is the only asset we can hold without relying on anyone's promise. Because stocks are a company's promise, bonds are a government's promise, deposits are a bank's promise. But gold in our hands is not a liability of anyone. Therefore, it is an asset that people flock to when all promises become untrustworthy.

Another point to mention here is that you will see it repeatedly in every empire: what Ray calls the types of financial systems. He points out that throughout history, [inhale sound] the world's financial systems have swung between two extremes. The first extreme is pegging money to something hard, like gold or silver. This system does not allow printing money at will, so it creates discipline and trust. But its disadvantage is that it is too rigid in times of crisis. When the economy urgently needs money to sustain itself, the government can do nothing. The second extreme is pure paper money, or Fiat Money, which can be printed at will. It is very flexible in times of crisis; money can be printed immediately. But it always leads to overprinting, and history repeats the same trick. It usually goes like this: starting with money pegged to a precious metal to build faith. When a crisis comes, the peg is broken to print money to solve the problem. Printing continues until inflation erodes all faith. Finally, it must return to being pegged to a precious metal to regain faith. This cycle has repeated for hundreds of years. Currently, we are in a world that we call the era of pure paper money, since 1971. That's 50 years, which is considered a long time. From a historical perspective.

There is another term I want to leave you with. Economists call the privilege of the reserve currency country "Exorbitant Privilege." This term was coined by the French Minister of Finance in the 1960s, who complained about America's advantage. Because that term implies that the privilege is beyond what it should be. And things that are beyond their limits will eventually return to their limits. I want you to remember these three terms: accumulated debt, printing money, and eroded faith. You will see these three terms repeated in every empire the world will visit.

Alright, it's time to get in the time machine and travel back to our first destination: Amsterdam in the 17th century. If someone asked who the first new world superpower was, many might think of England or Spain, but no. The first new world superpower was a country with a small territory, much of which was below sea level. That was the Netherlands, or what we call Dutch. So, the first thing to say is that a nation's greatness does not depend on its land size or population. The Dutch in the 17th century had a population of less than 2 million people, but they rose to become number 1 in the world in trade. Why? Because what was in the minds of the Dutch at that time was that they had just fought to free themselves from Spanish rule. They were a society of merchants, craftsmen, and sailors, and were the most open-minded in Europe at that time. Anyone oppressed by religion could flee to Amsterdam. Thinkers, scientists, printers, writers, artists, capitalists, all flocked here. And then, exactly according to Dalio's formula, it started with education and knowledge. [inhale sound] Then the Dutch transformed that knowledge into innovation. And Dutch innovation was not just about inventions, but systemic innovation that we still use today. What did they invent?

1. And this is important: the world's first public company was founded here. We are familiar with it as the VOC, or the Dutch East India Company. It was a company that raised capital from ordinary people to sail and trade with Asia, including Ayutthaya.

2. The world's first stock exchange was also founded here, allowing people to buy and sell VOC shares.

3. And the Bank of Amsterdam was founded in 1609, making the Dutch Guilder a globally trusted currency. A tiny country gave birth to a public company, a stock exchange, and a modern banking system. This is why Dutch ships dominated the seas in that era, and as Ray Dalio stated, their currency became the first reserve currency of the new world, the first paper currency accepted by the whole world, replacing gold and silver, because it was backed by the credibility of the Dutch financial system.

Let me elaborate on the VOC. It was truly the heart of Dutch innovation. Before the VOC, when merchants wanted to sail on long trading voyages, they raised funds on a per-voyage basis. For example, for this trip, when the ship returned, they would sell the goods and divide the profits, and it was over. The risks were very high. If a ship sank, they lost everything. But the VOC changed the game with an idea that seems ordinary today, but was groundbreaking innovation at the time. Instead of investing in a single ship per voyage, people were allowed to hold shares in the company long-term. The company had many ships. If one sank, it was not a problem; there would be new ships. The risk was diversified. Large capital could be raised from ordinary people, not just the wealthy or royalty. And when people held shares in this company, they could sell them one day. The stock market emerged naturally. The book emphasizes that this was truly world-changing innovation. Many times, it's not a tangible invention, but innovation like this. In the case of the VOC, it was innovation in financial management and organizational management, which unlocked human capital and courage to seek unprecedented opportunities. If we compare the VOC then with what is happening now, I think what is happening now with AI is doing something similar. The Bank of Amsterdam was another step in innovation. In that era, Europe was full of coins of all sorts, from various cities, various types. Some were clipped, some had less than the full metal content. You know, in the old days, coins were real money. Merchants complained a lot. There was a technique. The Bank of Amsterdam offered a simple service: you could deposit any coin, and open an account in the bank's standard unit of currency. Payments could be made through the account, without needing to transport coins. In effect, the Dutch created a stable, trustworthy, and verifiable currency. European merchants no longer needed to transport coins. This was innovation. It became the foundation of the world's financial center, because the wealth of the entire continent flowed through Amsterdam, just as it flows through New York today. And of course, where wealth flows, bubbles follow. The Dutch in their golden age had a legendary event when talking about "bubbles" in capitalism. Everyone thinks of the Tulip Mania. During the 1630s, the price of tulips, which were rare, was speculated to the point where they were more expensive than houses, before crashing in an instant. This sounds familiar, and we have seen it many times. This tulip incident did not cause the empire to collapse, but it is strong evidence of what Ray Dalio says: where there is long-term prosperity, there will always be people who believe prices will rise forever. And wherever people believe that, there will always be a bubble, whether it's tulips in 1637, dot-com stocks in 2000, or anything that is very hot today.

And what happened after that? Why do people no longer use Dutch currency for trade today? The same formula: accumulated debt, printing money, eroded faith. When they became very rich, the cost of being an empire began to exceed income. The Dutch had to send fleets to protect trade routes worldwide, and had to manage colonies spread across all continents. These expenses increased every year. Meanwhile, competitiveness began to decline because rivals like England learned and copied everything the Dutch did, and did it cheaper. The later generations of Dutch were born into wealth. They transitioned from adventurous sailors to pleasure-seekers. The nation's savings were lent out for interest instead of being invested in creating new things. The end came in the Fourth Anglo-Dutch War during 1780-1784. The Dutch were decisively defeated, and the enormous expenses of that war forced the Bank of Amsterdam, once sacred, to print money beyond the gold backing it. When people found out, they rushed to withdraw money. The faith built over nearly 200 years collapsed in just a few years. Their currency lost its status as the world's reserve currency, and the Dutch permanently withdrew from the stage of great powers.

I want you to observe the timeline a bit. When the Bank of Amsterdam collapsed, the Dutch had already been in decline for a long time. Education declined first, followed by innovation, and competitiveness was lost decades earlier. But their currency remained until the very last second, as I mentioned. The reserve currency is the slowest to die. And because it dies slowly, it deceives everyone into thinking it's still okay, even though it hasn't been okay for a long time.

Now, let's move to the successor: the British Empire. Britain's rise followed the same formula. It began with investment in knowledge. In that era, Britain had a scientific revolution, with Isaac Newton and the Royal Society. And knowledge exploded into innovations that changed the world more than anything humanity had ever done: the Industrial Revolution. Steam engines, textile factories, railways, steamships. Britain became the world's factory. At the peak of the British Empire in the 19th century, the British population was only about 2.5% of the world's population, but they generated 20% of the world's total income and controlled 40% of global exports. Of the 40 people walking on the streets of world trade, almost half came from this single small island. The Pound Sterling also followed the same formula, gradually rising to become the world's reserve currency in the late 18th century, following the greatness of trade and the military. London became the world's financial center. Anyone wanting to borrow money to build a railway in Argentina or dig a canal in Egypt had to come to London. The period when Britain truly ruled the world without serious rivals was the century after winning the Napoleonic Wars in 1815. Historians call that period the Pax Britannica. Peace under the British umbrella. Britain controlled global shipping routes. The Pound and the gold standard were managed by London, becoming the backbone of world trade. Notice, it's the exact same role America played after 1945. Only the characters changed. From the navy to the air force. The Pound became the Dollar. London became New York. The structure is exactly the same. And as always, at this turning point, the seeds of decline were sown again. Two new rivals were emerging strongly in the late 19th century: Germany, which had just unified, with its industry and science rapidly advancing. The other was across the ocean: the United States, which had surpassed Britain in economic size since around the 1890s. But the reserve status of the Pound remained, because, as I said, this indicator dies the slowest. The world continued to be accustomed to using the Pound for many more decades, even though the internal engine had completely changed. And where did the decline come from? The short answer is war. But I want everyone to listen carefully here, because it might contradict common sense. Britain was the victor of the wars, winning both. Ray shows that in the game of the Big Cycle, winning a war on the battlefield and winning a financial war are two different things. World War I transformed Britain from the world's number one creditor to a major debtor. The wealth accumulated over 100 years melted away with [inhale sound] the war. And before they could recover, World War II struck again. This time, it was even heavier. Britain had to borrow massively from America through the Lend-Lease program, selling almost all its overseas assets to fund the war. When the war ended, Britain believed it was the victor, but a victor with a severely damaged wallet, with factories devastated. Meanwhile, a trading partner like America did not fight on its own soil. It became the creditor of the world and held the largest gold reserves in history. Between the two World Wars, there was an event that Ray Dalio considers a classic lesson in the cycle's downturn: in 1925, Britain tried to regain its prestige by returning the Pound to the gold standard at the pre-war exchange rate, even though the economy was much weaker than before. The result was that British goods became excessively expensive in the world market. The economy was squeezed to the point of severe pain, until finally, they had to abandon the gold standard in 1931 anyway. The lesson? The attempt to maintain past glory without accepting the reality of the present has a high price. Countries, organizations, or individuals who deny the truth about their status will always pay that price. And the world convened in Bretton Woods, New Hampshire, in 1944 to design a new global financial system. The war was not yet over, but the victors knew they had to quickly write the rules. The Bretton Woods scene is a historically renowned one. Britain sent its top economist of the era, John Maynard Keynes, to fight hard, even proposing a new global currency that was not tied to any single country. But ultimately, the American proposal won. Why? Perhaps not for academic reasons, but because America was the creditor and Britain was the debtor. The negotiation table always reflects the balance of power. This is a major principle that this book writes politely: where power lies, there lie the rules. The result was that the US dollar became the world's reserve currency, officially pegged to gold at $35 per ounce, and other currencies were pegged to the dollar. The era of the Pound ended there. [inhale sound] After that, the Pound was devalued significantly several more times after the war, from around $4 per Pound to $2.80 in 1949, and further down in 1967, making it impossible to regain its former glory. And if you want the clearest image of this generational shift, it was the Suez Crisis in 1956, when Britain and France sent troops to seize the Suez Canal, a remnant of the old colonial era, and were forced by purely financial pressure from America to withdraw their troops shamefully. The entire world clearly saw that week who the new boss was, without firing a single shot.

To summarize the lessons of the first two empires: the Dutch taught us that a small nation can become a superpower if it wins through education and innovation, but the resulting wealth often brings complacency. The British taught us that even war victors can lose the cycle if their victory comes at the cost of excessive debt. And when a nation's financial status collapses, all its former power will gradually crumble with it.

Now, the baton passes to the United States. In 1945, the United States stood at the highest point any nation had ever reached in human history. The question is, 80 years later, this year is 2026, where does America stand today? First, let's briefly recap. We know that the Big Cycle is driven by five forces and measured by eight indicators. We saw the Dutch decline due to debt and loss of competitiveness. We saw the British win wars but lose the financial war. Now, let's move to the era of the United States. In 1945, after World War II ended, America was the most decisive victor in history. The American economy was half the size of the world's. Most of the world's gold reserves were in US vaults. And according to the Big Cycle formula, the decisive victor writes the rules. America created a whole new world order: the United Nations for security, the Bretton Woods system for finance with the dollar at its core, the GATT agreement that later became the WTO for trade, and NATO for military alliances. This is the world order we were all born into. It seems natural, permanent. The UN seems like it must always exist, right? Until we forget, sometimes, that all of these were designed, created by the victors of the war 80 years ago, and they have an expiration date, like all previous orders.

The first 30 years after the war were a golden age, exactly as in the textbook. Peace, investment, certainty. There were small, minor wars, but overall, it was a golden age. Peace, investment, a booming middle class, the American Dream emerged in this era. America invested heavily in education and science. American universities were the driving force for technology and innovation. Laws were passed to support millions of people attending university for free. A transcontinental highway system was built, which, even today, is considered a very impressive highway. Huge R&D budgets led to many new industries, from semiconductors to the internet, which originated from military research. And the moon landing was the most famous declaration of technological prowess in history. Notice that all of these are Ray Dalio's upward phase formula: education, innovation, infrastructure. It's not magic; it's investment in the right place, at the right time, and of sufficient scale.

But beneath the prosperity, the same seeds of decline began to sprout. America started to overspend, both in the Vietnam War and on domestic welfare, until the gold backing the dollar became insufficient. Other countries began to lose trust and gradually asked to exchange their dollars for gold. And this brings us to the event we are discussing today: August 1971. Nixon closed the gold window, severing the link between the dollar and gold. He wrote in the book, and I quote directly, that in 1971, the United States defaulted on its debt, but they just didn't call it that. From that day on, the world's money became fully fiat money, backed by nothing but confidence in the government that printed it. The consequence in the 1970s was soaring inflation, and gold prices skyrocketed, which is consistent with the textbook pattern of currency devaluation in every instance over the past 500 years. After 1971, America faced the side effects of the medicine it had taken: prolonged inflation throughout the 1970s, reaching double digits. It wasn't until the legendary Fed Chairman Paul Volcker dared to raise interest rates to almost 20% in the early 1980s, allowing a severe recession to kill inflation, that it worked. And this is where another very important chapter begins. Because after that, US interest rates entered one of the longest downward trends in history, from almost 20% down to 0. A 40-year downward trend in interest rates means that borrowing became cheaper every year. So, the entire system started borrowing enthusiastically: the government borrowed, companies borrowed, households borrowed. Debt compounded in all sectors. Every time the economy stumbled, the Fed would lower interest rates to help. This became a reward for borrowers and a punishment for savers. If you borrow and the interest rate next year is lower, people want to borrow even more, right? Until a critical turning point, which was 2008: the subprime mortgage crisis. The real estate bubble burst. And because interest rates had fallen to zero and were not enough, the US Federal Reserve had to bring out tools that hadn't been used since the 1930s: quantitative easing, or printing money to buy bonds. And when the COVID-19 crisis hit in 2020, they printed even more. It was like giving it away directly. And these two major rounds of money printing have had the side effects that have been pointed out all along: they have driven up asset prices. Stocks, houses, land have increased massively. And who holds these assets? Those who already had them. This is why there is a problem now: young people cannot afford to buy houses, not just in America, but in many countries. The result is that the wealth gap in America has widened rapidly. This is what "cash is trash" means. Those who own assets have become richer by leaps and bounds without doing anything. Meanwhile, those who only have salaries face rising living costs, and the dream of their first home becomes increasingly distant. The American Dream that was possible in the 1970s is no longer there. He wrote an analysis stating that this divides America into two countries in one body: the economy of the top earners is booming, while the economy of the majority is becoming tighter every year. And a statistic he often cites is a Federal Reserve survey showing that 40% of Americans cannot find $400, or about 14,000 baht, to pay for emergency expenses without borrowing or selling something. This is 40% of people. Half of the country can't find $400. This is the richest country in the world. And this kind of inequality is the fuel for the polarized politics we see today. Because for those who feel left behind by the system, extreme proposals from one side will sound reasonable. The book says it doesn't say that doing so is wrong. From his perspective, when you reach that point in the cycle, there are almost no other choices. The point is, every time money is printed, it's a withdrawal from the currency's confidence account. And this account can be withdrawn from endlessly until it's depleted. And how much is left today? The most frequently mentioned number recently is that US public debt has exceeded $38 trillion. And the government is still running a deficit of about 7% of GDP annually, even though the economy is not in a crisis. But money is only half of America's problem. The book says the other half, which is equally concerning, is internal conflict. And here, we must talk about another framework of his: the six stages of internal order. Stage 1: New order begins. New leaders consolidate power after major turmoil. Stage 2: The system of resource allocation and state mechanisms are created and refined to perfection. Stage 3: Peace and prosperity. This is the good period. Stage 4: Overspending and ballooning debt. The gap between the rich and the poor widens. Stage 5: Financial deterioration and escalating conflict. Stage 6: Civil war or revolution, and then back to Stage 1. I want to go into detail about these six stages because the charm of this framework is that it allows us to diagnose where a country is by observing real symptoms. For example, Stage 3 is the period when everything is in order. People have jobs, opportunities are open. Most people will feel that if they work hard, their lives will improve, and the system is fair enough for people to believe. America after the war, in the 1950s and 1960s, was the archetypal image of this stage. The middle class could buy a house on a single salary. A husband and wife, one salary could buy a house. Children could get a better education than their parents. The White picket fence, the American Dream, this was the period. It was the most real period. [inhale sound] Real, meaning that the story of working hard and improving your life, the fair system, this actually happened. When it enters Stage 4, the symptoms begin to change. Wealth...

Although still growing, it is growing through debt and speculation rather than real productivity. Money flows into assets instead of factories and labs. The gap between those who own assets and those who don't is widening faster and faster. The rich are getting richer by holding certain assets, not by producing or creating anything. Society is starting to celebrate consumption over production. When you hear this, what era do you think of? [Sigh] Think about it. Stage 5 has 3 main symptoms: 1. The government's financial and fiscal situation deteriorates until the government has to choose between printing money or defaulting on its promises to the people. 2. Conflict is no longer confined to parliament; it spills onto the streets. And 3. What the book emphasizes greatly is that society loses its shared reality. The media fractures into factions. Facts become a matter of which side you are on, and you believe the fractured truth of your own side. Wow, this is written from a big picture perspective, which also makes us think of our own country. And when two groups don't just disagree on solutions but disagree on what the problem is, compromise becomes impossible. History tells us that when elections cannot resolve conflicts because the losing side does not accept the results, it leads to Stage 6. Ray asks, "Where is America today?" He actually answers this question in several articles. The latest is an article in Fortune, 2026, which states, "We are now in a new stage 5, before the breaking point." He then says to look at the evidence for each point of Stage 5. 1. The government is large and growing rapidly, coupled with geopolitical conflicts, leading people to worry about the value and safety of money, especially reserve currencies. Money is also starting to flow out of paper currency into gold, which is exactly what has happened to gold prices in the last 2-3 years. 2. The gap in income, wealth, and values within the country is so wide that it has led to populism on both the left and the right, and extreme polarization that can no longer be reconciled by normal rules. Dar even writes about the phenomenon he calls "horses and cows" in America, such as sending troops into cities, conflicts in Minneapolis, and people starting to question whether elections will proceed normally. He says this is a symptom of the "Pre Civil War" period. And 3. The shift from a world with a single superpower maintaining peace to a world of "Great Power Conflict," where multiple superpowers confront each other. It sounds heavy, doesn't it? But to be fair, I must emphasize that what Ray Dalio always says is that he is not saying that America will definitely have a civil war with guns firing. He writes in Time that what he is saying is that the probability of civil war in any form, which might even be a non-violent form, is much higher than people generally think. History tells us that the conditions America has today – massive debt, extreme polarization, and fractured truths – are a classic cocktail that has led to violence countless times throughout history. He gives an example of a poignant comparison in the Fortune article, stating that democracy rests on two pillars: the right to disagree and the willingness to follow the rules. But whenever disagreement becomes too great, people lose faith in the rules, democracy descends into chaos, and dictatorial leaders gain power. In the 1930s, four major democracies – Germany, Japan, Italy, and Spain – all became dictatorships. And he adds a sentence: "This is not new." Plato wrote about the mechanism by which democracy degenerates into tyranny in "The Republic" as early as 375 BC. In summary, the picture of the current situation in Ray Dalio's eyes is a financial engine stuck in the deepest debt since World War II, a social engine fractured into two halves since the Civil War of 1861, and externally, the strongest challenger America has ever faced, which we will discuss in the next segment: China. When Westerners look at China, they often see it as a new rising star that has emerged in the last few decades. But Dalio has studied the history of Chinese dynasties for hundreds of years, so his perspective may differ considerably from that of Westerners. In the eyes of history, China is not a rising star but a former champion returning to reclaim its throne. Because for most of human history, China has been one of the wealthiest and most advanced civilizations in the world. It only stumbled for a relatively short period of about 100 years. This period of stumbling has a specific name for the Chinese people: the "Century of Humiliation," from around 1840 to 1949. It began with the Opium Wars, where Britain used gunboats to force China to open its borders to opium, followed by being attacked by Western powers and Japan, losing territory and sovereignty, and eventually leading to its own civil war. The book emphasizes that this memory is not just in history books for the Chinese people; it is a fresh wound and the fuel for the comeback we see today. At this point, I need to mention Ray Dalio's personal connection to China. When discussing China and the United States, there are many different perspectives. I will share mine, not to say the book is right, but to explain why it is written this way. Ray Dalio first visited China in 1984. In those days, China was still very poor. He often tells the story that he brought a portable calculator as a gift, and Chinese officials looked at it as if it were a magical item. Over 40 years later, the same country is competing with America in AI, space, weapons, and everything else. Ray Dalio has witnessed this change firsthand. He has known several generations of high-level Chinese policymakers. Therefore, when he talks about China, he is someone who has been in this field for decades. However, some criticize him, saying that his closeness to China might lead him to view it too positively in some aspects, which I will gradually explain. Another reason why Ray Dalio's analysis of China is interesting is that he doesn't just study modern China. His team has gone back to study the cycles of many Chinese dynasties over hundreds of years. They found that Chinese dynasties rise and fall according to the same "big cycle" as Western empires. It begins with a strong leader unifying the land, creating a system of prosperity and wealth, and then gradually declining with the same formula: fiscal collapse, currency devaluation, peasant rebellions, and then a new dynasty rises. The Chinese people have had a concept for this for thousands of years: the "Mandate of Heaven." A dynasty that rules well is one that is blessed by heaven, and when the country collapses, it is a sign that the mandate has been withdrawn. In Ray Dalio's terms, the Chinese people understood cycles at a cultural level long before he coined the term or before the West did. This is why current Chinese leaders study the history of the decline of great powers so seriously. However, he says that Chinese leaders do not just fear external rivals; they also fear their own cycles. A significant turning point occurred in 1978 in the new era of China when Deng Xiaoping came to power. Ray Dalio recounts that when Deng Xiaoping transformed China from a rigid communist system to one that increasingly embraced market mechanisms and capitalism, opened up to foreign investment, and allowed Chinese people to learn from the world, under the simple but powerful philosophy of "It doesn't matter if a cat is black or white, as long as it catches mice." What are the results after 40 years? Hundreds of millions of Chinese people have escaped poverty. China has become the factory of the world, the second-largest economy in the world, and in many aspects, such as production capacity and global trade share, it has surpassed America. China's rise follows the archetype step by step. It began with studying China, investing heavily in universities, and sending students to study worldwide. Next came innovation. From a country once mocked for copying, China now holds the most patents in the world and is at the forefront of electric vehicles, batteries, solar cells, and AI. Then comes competitiveness and trade share. China has become the largest trading partner for most countries in the world, including Thailand. Now, let's look at the final indicators: a rapidly growing military, a developing financial center, and efforts to promote the yuan on the global stage. As Ray Dalio's framework suggests, these two indicators will follow, as they are always the final indicators. The global status of the yuan still has conditions to be met before it can become a reserve currency. There are still quite a few conditions for that, such as capital controls. But we won't go into that, because I believe they can change if they want to, as they now understand that certain connections might be an issue. Now, if we compare Ray Dalio's 8 indicators, China's graph is rising steeply in hundreds of years, while America's graph is declining. History tells us that the time when these two lines are close is the most dangerous time for the world. The book states precisely that the risk of military war is highest when two sides have nearly equal strength and are in conflict over issues that both consider existential and cannot be conceded. When we think about this, we realize it's true. But before we get to the form of war, I want to explain Ray Dalio's fundamental thinking about international relations, as he explains why the international world is harsher than the domestic world. The book points out that a good governance system must have four things: laws and legislative processes, police and enforcement, judges and judgments, and clear and enforced punishments. If a country has all four, it will be well-governed. But internationally, these are absent or very weak. The United Nations has limited power. When superpowers conflict, they cannot be dictated to. International order is actually "the law of the jungle," rather than international law, because there is no real legislative process or courts. It sounds brutal, but he says accepting this truth is very important. Because if we mistakenly believe that the world is protected by rules like domestic law, our country will always invest excessively and underestimate risks. In the real world, rights come only with the power to protect those rights. There are two other concepts I like. The book discusses the concept of "Guns and Butter." It's a classic historical analogy: a country with limited resources must choose between military spending (guns) and the well-being of its citizens (butter). The book says that truly great nations must solve both problems. And the nations that have lasted the longest in history have lasted about 200-300 years, but no one can do it forever. The day you have to choose between guns and butter is the day the country begins to weaken, facing enemies from abroad and dissatisfaction from within. America won the Cold War in this way: it spent money so heavily that the Soviet Union couldn't keep up, without firing a single shot. Financial strength allows for greater spending than competitors, the quietest but most powerful weapon. The second concept is the principle of using power. In short: have power, respect power, and use power wisely. Having power is important because at critical junctures, power always wins over agreements. Respecting power is important because choosing to fight a war you know you will lose is not bravery; it is foolishness. And using power wisely is important. What's interesting is that Ray says that most of the time, wise use of power means not showing it. He compares power to a hidden knife, only drawing it out when absolutely necessary. Because flaunting power only makes the other side fearful and leads them to build up their own power, creating an increasingly dangerous cycle. He also adds a very human observation: power beyond necessity is a burden. Maintaining that power consumes both money and time. He says he has observed throughout his life that people with less power are often happier than those with immense power. This is something to ponder, though it might not be a major point of this book. Now, let's talk about war. When superpowers fight, how do they fight? Ray Dalio observes that there are five types of international wars, from mild to severe: 1. Trade and economic war, using tariffs and import/export controls to undermine the other side. 2. Technological war, competing for technological dominance and preventing critical technology from falling into the hands of competitors. 3. Geopolitical war, vying for territory and allies through pressure and negotiation, without resorting to combat. 4. Financial war, using financial tools as weapons, such as sanctions, asset freezes, and exclusion from payment systems. 5. Hot war, which is actual military combat. Let's check where America and China stand today. Trade war has already begun. Tariffs between the two countries started in 2018 and escalated significantly in 2025. Technological war has begun. America banned the export of high-end chips to China, and China retaliated by controlling rare earth minerals. Geopolitical war is clear, in the Taiwan Strait and the South China Sea. Financial war has also begun, with restrictions on investment between them and various other measures. The world has also seen the full case of Russia, where its central bank's reserves were seized, which was indeed possible. In summary, 4 out of 5 have arrived; only military war remains. So, what will determine if the fifth will come? The explanation in terms of strategy is that the most foolish war is one where the cost in lives and money far outweighs the benefits. Most leaders know that such a war is foolish, yet history is full of foolish wars. Why? He says to think of game theory. The first is what we call the "Prisoner's Dilemma." What is the Prisoner's Dilemma? It's a situation where both parties know that cooperation is best, but because neither trusts the other 100%, each side decides to act first, fearing the other will act first. Fear feeds back into itself. You know you shouldn't, but you're afraid. The second is the "eye for an eye, tooth for a tooth" cycle, where each side feels they must retaliate more strongly each time, or they will lose face and suffer losses, like two cars driving towards each other in a game of chicken. The third is the cost of backing down, especially for a declining superpower. Backing down is not just losing territory or benefits; it's announcing weakness to the world, which will accelerate the defection of allies and embolden competitors. And the fourth is simple misunderstanding. In situations requiring quick decisions, incomplete information, volatile emotions, and high pressure, a slight misinterpretation of the other party's intentions can lead the world to ruin. So, is there a way out? The book proposes principles that seem simple but difficult to implement: win-win negotiations. Win-win negotiations can only happen when each side knows what is most important to the other and finds a smart way to exchange, knowing each other's red lines and communicating them as clearly as possible. Ambiguity about red lines is a time bomb. He also warns national leaders, saying that the most dangerous thing is leaders who incite their people with false information and emotions. Once hatred is ignited, even the leaders themselves cannot extinguish it. The people are incited to a boiling point, pushing the leaders to become increasingly hardline until all peaceful options disappear. He writes another point: two things are certain about war: 1. It will not go according to plan, and 2. It will always be worse than imagined. The simple reason is that superpowers only fight when their strengths are nearly equal. If the gap is too large, the weaker side will always yield first. Therefore, every major war is a collision of two giants who are convinced they will win, and one of those sides must be mistaken. Now, the critical point for China and the United States is, of course, Taiwan. Why is this small island the most dangerous point in the world? Let's look through Ray Dalio's lens. He says that major wars occur when the issue is existential, meaning it's a matter of life and death that neither side can concede. Taiwan fits this criterion. For Beijing, unifying Taiwan is the key to ending the Century of Humiliation and a matter of regime legitimacy; they cannot back down. For Washington, letting Taiwan go without doing anything would be equivalent to announcing to all its Asian allies that America's guarantees are meaningless, which would cause the entire alliance system to collapse from within. So, they also cannot back down. And on that island, there is a third hidden factor: Taiwan is the world's most important source of high-end semiconductor chips. The brains of everything from mobile phones to missile systems and AI are concentrated on this island, which is also the most vulnerable point in the world. Some geographers call it the "Silicon Shield" because its importance makes everyone hesitant to destroy it. But conversely, it is such a great prize that some might consider it worth the risk. What is the probability of war today? Ray Dalio has estimated that the chance of a hot war between the US and China within 10 years is around one in three, and the trigger point is likely to be Taiwan. He says this is not a prediction but a risk assessment, like buying home insurance even though you don't expect your house to burn down. His point is that this level of risk is too high for anyone to ignore. And the reason Ray Dalio is so concerned is that he says he has seen this movie before. He uses an interesting case study: the path to World War II. I want to recount it carefully so you can feel whether you agree with Ray or not. It starts with the economy. America's stock market crashed in 1929, leading to the Great Depression that spread worldwide. America responded by imposing severe tariffs in 1930. The result was a further contraction of global trade, and the economies of all countries worsened. He summarized the principle from this event: raising import tariffs to protect domestic businesses during economic downturns is a common occurrence. It helps the protected groups and gives political popularity to the leaders who implement it. But overall, it weakens the global economy because production does not occur in the most efficient locations. Poverty and despair follow, creating fertile ground for extremist politics. In Germany, 25% unemployment and the lingering shame of the Treaty of Versailles fueled Hitler's rise to power in 1933. He consolidated absolute power within less than two years. What is chilling is that Ray points out that purely from an economic perspective, Hitler's policies worked. Massive fiscal stimulus, building roads, the Autobahn, and Volkswagen. Unemployment dropped from 25% to 0 in five years. The economy grew by 8% annually, and the German stock market rose by nearly 70%. This is why many people at the time turned a blind eye to what he did to freedom and minority groups. It is an eternal warning that beautiful economic figures can coexist comfortably with political darkness. What about the United States? How did it handle the Great Depression? This is a major lesson. It took three and a half years after the market crash until Roosevelt took office in March 1933. He launched his famous first day: decoupling the dollar from gold, printing money, launching massive spending programs, creating social security and unemployment insurance, and, what people often overlook, a fierce tax increase on the rich. The top marginal income tax rate in the United States rose from 25% in 1930 to 81% in 1941. Ray patterns this as follows: in times of severe economic downturn and wide wealth inequality, there will always be a major, revolutionary redistribution of wealth. If lucky, it happens peacefully through taxes and money printing, as in America and Britain. If unlucky, it happens bloodily through asset seizures and revolutions, as in many countries. The interesting question for our era is, in what form will this major redistribution of wealth occur this time? Because if history is accurate, it will come. The results of that strong medicine were remarkable. The American stock market returned over 200% between 1933 and the end of 1936. The economy grew at an average of about 9% per year. But in 1936, the Fed quickly raised interest rates, fearing the economy was overheating. The result was that the still-fragile economy fell back into recession in 1937, further increasing tensions both domestically and internationally. During the same period, conflicts between the left and right in Europe erupted into civil war in Spain, which became a testing ground for the superpowers before the major war. In Asia, Japan faced a severe crisis as well. As an island nation with no resources, relying on exports, when exports halved between 1929 and 1931, the Japanese government went bankrupt, had to abandon the gold standard, and its currency collapsed. Politics swung back and forth, eventually leading to the rise of the right-wing militarists. Japan's answer to resource scarcity was to take from others, starting with Manchuria in 1931 and spreading throughout Asia. Now, here is an important lesson from this study. How did America respond to Japan? Not with bullets, but purely with economic tools. It started with exporting steel and war materials, and gradually escalated until the knockout blow in 1941: seizing all Japanese assets in America, blockading the Panama Canal, and imposing an oil embargo on Japan. This set of measures cut off three-quarters of Japan's trade and 80% of its oil. Japan calculated that its oil reserves would run out within two years. Think about it: at that point, Japan had only two options: 1. Withdraw from all occupied territories, which was an unacceptable humiliation for the Japanese military leadership, or 2. Strike first before the oil ran out. And on December 7, 1941, the world got its answer at Pearl Harbor. Ray Dalio summarizes this pattern as a principle that I think we can remember and use: before a war breaks out, there is usually an economic war for about a decade. World War II is considered to have started in 1939, but in reality, the conflict began about 10 years earlier through tariffs, fiscal policies, technology, and financial blockades. Now, let's apply this lens to today. If we compare it to the 1930s, there were tariffs; today, we have tariffs starting in 2018 and escalating significantly in 2025. In the 1930s, there was a blockade of competitors' resources and technology; today, we have serious bans on high-end chips and retaliation through control of rare earth elements. In that era, there were asset seizures and economic boycotts of Japan; today, we have seized Russia's central bank reserves and cut it off from the SWIFT system. In 2022, there was extreme inequality and the rise of populism on both the left and right worldwide. Today, we don't need to explain; we see it in politics. In that era, there was historical money printing after decoupling from gold, followed by quantitative easing and money distribution that might be much larger than then. If we count by Ray Dalio's clock, it has started. But of course, this does not mean war is inevitable. And again, it does not mean that what happened in the 1930s will happen exactly the same way. Before concluding the topic of war, I want to add a bit more, as a thought. The first point is about wartime economics. The book compiles that when a full-scale war breaks out, governments worldwide will do the same thing: control almost everything in the economy. They will dictate what factories must produce, how much citizens can buy, control prices, wages, imports, and exports. And what people often don't consider is limiting access to our own money: prohibiting money transfers abroad, freezing accounts, and closing stock markets entirely. This is not theory; it is what happened in warring countries during World War II, and a milder version of it just happened to Russia in 2022, with domestic capital controls and the West seizing about $300 billion in Russian central bank reserves. International trade during wartime will revert to the only thing everyone accepts: gold, because no one trusts the enemy's paper money, or even their allies' paper money. He observes that in wartime, stock markets no longer reflect the economy but the probability of winning or losing. German stocks rose when they successfully invaded Europe and plummeted after the defeat at Midway in 1942, which was the turning point that led to Allied stocks rising almost non-stop until the end of the war. The stock markets of Germany and Japan were closed for about five years and reopened with almost zero value. The lesson here is harsh but true: losing a major war means a complete reset of a country's wealth. And the advice for investing in wartime, distilled from history, is short: sell bonds, buy gold, because war is always paid for by borrowing and printing money. The second point is: what about China? Is it a challenger without weaknesses? Ray Dalio's answer is no. He writes in an analysis in Time in 2024, titled "How China Will Be Challenged by 100 Years Strong," that China itself is facing its own major storm, including a real estate crisis and a rapidly aging population structure, which is the same challenge Japan faced in the 1990s. But when it comes at a time when the conflict with America is intensifying, the conclusion is that this is not a story of heroes and villains or a rising star versus a falling star. It is about two giants who are actually both internally wounded and must confront each other on a stage where the rules are breaking down. In some ways, this is even more frightening, because history tells us that leaders facing severe internal pressure tend to seek external enemies to divert attention. Now, we have discussed history quite a bit. There is more in the book. The book ends in 2021, but what happened after that? What happened after the book ended? What I have observed from following Ray Dalio and listening to him over the past two years is that his tone has changed from that of a scholar calmly recounting historical patterns in this 2021 book to someone who is increasingly and forcefully sending out signals, like someone who has seen storm clouds gathering for a long time and now sees the first raindrops, but no one seems to pay much attention. Let's look at the timeline. April 2025, during the peak of the new tariff war, Ray Dalio appeared on NBC's "Meet the Press" and made a headline-grabbing statement. He said, "We are now very close to a recession, but what he is really worried about is 'something worse than a recession' if all of this is not handled properly." The interviewer asked what he meant. He explained that what will happen is deeper than import tariffs; it is the collapse of the financial order, the domestic political order, and the international world order simultaneously on all three levels. He concluded by saying that times like these are very similar to the 1930s. Let me add some context for April 2025, in case anyone has forgotten what the atmosphere was like then, which was just over a year ago. In early April of that year, the US government announced major import tariffs on goods from almost every country worldwide simultaneously. Global stock markets plunged. What truly worried financial professionals was not the stocks, but the US bond market, which was unusually volatile. Bond yields rose significantly. Normally, when the stock market crashes, money flows into US government bonds as a safe haven. But this time, there was a signal of money flowing out of both stocks and bonds simultaneously. In Ray Dalio's textbook, this is the initial symptom of something much more frightening than a normal crisis: the world is beginning to question the entire American asset system. Ray Dalio and many other senior financial professionals warned that week that this was so serious that it became one of the pressures that led to many tariff measures being postponed and adjusted later. How many people remember? June 2025, he reiterated in an interview with Marketplace, using the term "Bond Market Heart Attack." At that time, he was with many other billionaires who were warning about the US deficit. There were many who thought like him at that time. Mid-2025, Dalio released another book titled "How Countries Go Broke," which delves deeply into cycles, or "the big debt cycle," in particular. In the book, and in his interviews during that period, he used a very memorable analogy. He said that America's current debt is like plaque in the coronary arteries. [Inhales] The interest payments are forcing blood, or purchasing power, to flow less and less. And if the government continues to sell more new bonds than the world wants to buy, one day there will be what he calls an "economic heart attack," the moment the bond market no longer accepts new debt, interest rates skyrocket, the currency plummets, and everything collapses simultaneously. What's interesting is that he doesn't just threaten; he also offers a prescription. He calls it the "3% solution." Simply put, he says the US has a budget deficit of about 7% of GDP and needs to reduce it to 3% through a combination of spending cuts, increased revenue, and lower interest rates. He says this was achieved in the 1990s when the Clinton administration and the Republican Congress cooperated, leading to a budget surplus. He says the problem is not technical but purely political. He says that in the current atmosphere, the two political parties are unwilling to compromise. Therefore, when no one compromises, the country suffers instead. January of this year, Dalio spoke about the debt reaching $38 trillion and said that his grandchildren, who have not yet been born, will have to pay off this debt with a devalued dollar. He explains that countries with such high debt have rarely solved the problem by austerity or direct default. The choices they always make are a combination of currency devaluation and money printing, as it is the most subtle form of debt default. And there is much more. But most recently, the core message I want to convey is from a recent article in Fortune. It has three parts. The first part says most people are shocked by what is happening in the world today, but I am not shocked because I have seen this movie before. What is happening is unfolding in the same way it has unfolded many times before in history. The second part says the future will be completely different from what we have been accustomed to our entire lives. It will be more like the world before 1945 than the world after 1945 in which we grew up. Think about this sentence for a moment: everyone under 80 years old has never experienced what he is talking about. And the third is that he says "nothing is predestined." There is still an opportunity for world leaders to choose not to fight, to choose to join hands and do difficult things to overcome the statistics of history. But he also closes frankly, in his typical style, that given human nature as he knows it, he is not very optimistic. This is what Ray Dalio has been saying recently. But I must say, as I mentioned, books are books, and people are people. Nothing is 100% correct. Many people disagree, and his work is heavily criticized by economists, historians, and others. So, I will discuss four main counterarguments. Point 1: History is not physics. Many academics view this through the lens that trying to force the complex history of humanity into a precise cyclical template carries the risk of "cherry-picking," selecting data that fits the theory and ignoring contradictory data. That is, anything that doesn't fit the theory is discarded. Anything that fits is included. It sounds cool. Ray Dalio's main case studies are only three empires and a period of Chinese dynasties, which statistically is a very small sample size. To conclude that America must follow the path of the Dutch and the British is like watching three movies and concluding that all movies must end this way. Okay, that's a valid criticism. Ray Dalio himself admits in the book that what he proposes is a rough template, not a rigid script. Point 2: This point is more interesting: the dollar has no real competitor. Those who disagree have strong facts. The dollar has problems, and I think everyone can start to see that the dollar has problems, and America has debt problems. But the question is, what will the world flee to hold instead? China's yuan has strict capital controls. China's capital markets are not yet open and transparent. How can global banks put their reserves there? Or will they keep them in euros? The euro also has its own structural problems. Gold and digital assets have market sizes that are too small to absorb the wealth of the world. In simple terms, the dollar may be an old shirt with a few holes here and there, but it is still the only shirt in the closet that can still be worn. Its status as a reserve currency may last longer than all the debt figures, $38 trillion, suggest. This perspective is not entirely contrary to Dalio's, as he himself says that reserve currencies are the slowest indicators to change. The real question is, how slow will it be? Are we talking about a timeline of 10 years, 50 years, or more? So, point 3: America has been underestimated and has come back many times. He says that those who disagree with Ray say, "Look back to the 1970s. Everyone said America was finished: soaring inflation, lost the Vietnam War, oil shock. In the 1980s, everyone said Japan would buy up America. The book 'Japan as Number One' was a bestseller. And what happened? America roared back with the computer and internet revolution. Today is similar. While we worry about debt, leading companies are leading the world in AI technology, which could be the biggest productivity revolution in history. And don't forget Ray Dalio's fifth point: new technologies can change the game entirely. If AI causes the American economy to grow very rapidly, this entire equation will change, because the numerator, GDP, will grow to match. Ray himself seems to be changing his tone on this, talking about AI more often recently and admitting it's a big variable, but he also warns that the market might be too excited about it. And point 4, I think, is very sharp: the observation about vested interests. Some people question whether Ray talks about these things and recommends buying gold while his own investment portfolio is aligned with this theme. Is this an objective analysis, or is he biased towards his own portfolio? You know, it's like, are you influencing people to invest this way so your portfolio will go up? I cannot make that judgment for anyone. We have to do our own research. We have to do our own research. The best approach to this book, I think, is to not believe everything and not dismiss everything. We can view his framework as risk management. It's like if he says, "This area is very stormy, so let's put on a life jacket." Now, how many minutes have we been talking? An hour and a half. What can we do? Many people will ask this question. We will dedicate our final segment to discussing this point: what can we do? Wow, after listening for so long, I'd like to divide it into three levels: country, organization, and individual. Let's start with the country level. The book concludes at the end of Chapter 6 with a beautiful statement: all great powers eventually decline, but decline doesn't have to end in disaster. Some countries have gracefully fallen from their thrones, like the Dutch and the British, who are still developed countries today, and everyone lives well. I recently went to Amsterdam, a city I love very much, and it remains one of my favorite cities in Europe to this day. The conditions he provides are four: 1. Maintain productivity, meaning the country must be good at producing. 2. Earn more than you spend. It sounds basic, but not everyone can do it. 3. Make the system work for the majority, because when the majority feels the system is not on their side, the country will be overthrown from within. And 4. Maintain win-win relationships with important competitors; don't let competition turn into mutual destruction. Looking at these four points, many of you might think, like me, that they don't just apply to great powers but also to Thailand. Now, I'd like to add to this framework, as he didn't write about it, but I want to discuss it. We, the people, are a medium-sized country in many ways. I think we cannot afford to choose sides and should not. In a world where two superpowers are pulling in opposite directions, I think the most important thing for our country is to maintain balance, be friendly, or at least not create enemies. We have been doing this for a long time; we have our art of coexistence. But the challenge today is more complex because it's not just about talking; it involves supply chains, capital flows, and more. We will see efforts from both sides. The second point: in every crisis of world order, there is an opportunity for middle countries. When great powers respect each other, factories must run, and capital must flow, so they need to find new, safe places. This is the phenomenon of relocating manufacturing bases that has occurred throughout Southeast Asia in recent years. The question is, how ready are we for this opportunity? What about the quality of labor, clean energy, Thai regulations, laws, policy certainty, and political stability? Countries that seize opportunities from global conflicts are not lucky countries but prepared countries. The third point, I think, is the most important: never forget the leading indicators. In Ray Dalio's framework, education is key. If 500 years of history agree on anything, it's this: nations that are on the rise are nations that invest in the minds of their people. There is no other way. The Dutch started there, the British started there, America started there, China started there. And conversely, all declining periods start there as well. The literacy and numeracy scores of children today are leading graphs that predict the economy in the next 30 years. I talk about education frequently on our program because it is so important. The data supports it. Moving on to the organizational level, for business people, I divide it into three points. First, we must understand which stage of the cycle we are operating in. Strategies suitable for Stage 3, a peaceful, globalized world, are different from strategies for Stage 5. In one era, we built supply chains by asking simple questions like "Where is it cheapest?" or "Where is it most efficient?" But in a world where trade wars and sanctions are weapons, the question must change to "Where can we get supplies even when superpowers are in greater conflict?" Redundancy, once seen as excess cost, can become an insurance premium. Second, be wary of concentration in markets, sources of raw materials, and currencies. If there is one lesson from the transition of world order, it is that those who suffer the most are those who hang everything on a single pillar. Businesses that rely 100% on a single market, a single supplier, very few customers, and receive payment in a single currency are the most dangerous. We must say that what Ray talks about regarding the five forces of FCE can actually be applied well to business. 1. Money and debt: Ask simple questions. If the currency fluctuates heavily, interest rates swing wildly, and this and that happens, how many months can our budget withstand it? 2. Domestic conflict in our main market: How risky is it? 3. International conflict: Will our goods or raw materials be affected? 4. Natural disasters and pandemics: COVID taught us how brutal it can be. And 5. Technology: How will technology change our business? Therefore, if we consistently look at these factors and ask questions, like asking people in meetings, "What do you think about these issues?" I believe it will make us more cautious. Third, for organizational leaders, I think the lessons of Stage 5 domestically can be applied to organizations as well. Ray Dalio says countries collapse due to the wealth gap plus the loss of shared reality. Organizations are similar. An organization where returns are concentrated at the top, and others feel they get nothing from success, and where management has one reality and employees have another, will also collapse. Finally, at the individual level. I want to spend some time here because I know that after listening to this for a long time, many of you might feel overwhelmed. But I think this is important. This is important. Let's talk about money first. Ray Dalio's principle for ordinary people like us can be summarized very briefly: 1. Don't hold too much cash for too long. I'm not saying don't hold cash; just don't hold too much cash for too long, because in an era where governments worldwide have a huge incentive to print money, cash is a silently taxed asset every day. 2. Diversify seriously. Ray Dalio's lifelong motto for investing is diversification. He even calls having at least 15 uncorrelated assets the "holy grail" of investing. Therefore, diversify across asset types, currencies, and countries. It's much easier today. And 3. Have some assets in your portfolio that are not anyone's promise. For Ray, he talks about gold at about 10-15% of the portfolio, as a prudent insurance system, not a profit-seeking tool. I must reiterate that this is not investment advice from me. This is what Ray says. Whether you buy or sell anything is up to you to consider and decide based on your own context. But let's talk about diversification for a moment, because many people may misunderstand this concept. Diversification in Ray Dalio's sense is not buying many stocks. When a crisis comes, they all fall together. What he means is holding assets that respond to different worlds. For example, stocks are good when the economy is growing, bonds are good when the economy is slowing down with deflation, gold is good during inflation when people distrust the system, and foreign assets help when your own country has problems. The principle behind his famous "all-weather" portfolio comes from this idea: instead of predicting which season will come, create a portfolio for every season. And the reason this is especially important in this era of global system transition is that the harshest lesson from history in this book is that during such turbulent times, assets that people in that era believed were safest have become the most destructive to wealth. Germans who faithfully held government bonds in 1918, the British who saved solely in pounds in 1944 – everyone did what their era told them was correct, but the world changed the rules of the game. Another point I think is very beneficial is how to think about probability. What Ray Dalio always says, if you listen to him, is that he doesn't say something will happen 100%. He says a 1-in-3 chance of civil war. He doesn't say it ambiguously, but this is the discipline of a thinker. He knows that the future is not a straight path; it is a probability. I would like to invite everyone to think this way about themselves: instead of asking if a crisis will come, which no one can answer, try asking, "If it comes, how much will I be hurt?" And is the insurance premium we have to pay today to reduce that hurt expensive? If the insurance premium is cheap, but the damage prevented is immense, pay it. This is the core of Ray Dalio's advice. Therefore, I think we can choose who we want to be in this cycle today. Most people in the 1930s didn't realize they were in a movie. They just lived their lives and were swept away by history without warning. But we have something they didn't have: we have 500 years of data, we have people like Ray Dalio who lay out the patterns for us. This knowledge is not meant to make us afraid; it is meant to make us prepared, like weather forecasts. We know it will rain, but that doesn't mean we have to cancel our trip; just don't forget your umbrella. If you are listening and about to sleep, ask yourself playfully before sleeping: If the world in 10 years is more like the world before 1945 than the world we are familiar with today, what have we prepared? Both for our finances, our skills, and our minds. Whatever your answer may be, the last sentence in this book says that nothing is predestined. The future still belongs to those who take action and prepare today. I will conclude with his favorite principle from his first book, "Principles," which I have also reviewed at length. That book is excellent. I think this is most suitable for today's era. He says, "Pain plus reflection equals progress." Thank you all for following Mission to the Moon. We will meet again tomorrow. Goodbye. >> Mission to the Moon continues [music] with your mission >> If I have an office, two modes change the status to reduce unnecessary interruptions and make working in the office more convenient. The blue side, Focus Mode, indicates you are focused on work. The light pink side, Social Butterfly Mode, indicates you are [music] ready for conversation. Click the basket now. [Screams]