The new world order is nothing but a reference to the shifting of economic powers.
See, as nations rise and fall – through both internal and external conflicts – their ability to borrow and grow changes right along with the value of their currency.
The long and short of it is that the governments of prosperous countries eventually spend more money than they have. It becomes harder for them to pay their debts, so they print money and get inflation. At some point, conflicts emerge, reserve currencies change, and economic powers shift.
It all starts with a time of relative peace and growing prosperity. Borrowing increases along with productivity. Eventually, spending outpaces borrowing. The borrowing continues – as global savings and transactions are denominated in the nation’s reserve currency. Finally, the financial bubble bursts and more money gets printed to meet borrowing obligations. At the end of all the fighting the winners get to write the terms of the new world order.
5 principles to remember in dealing with all this?
- When central banks print a lot of money, buy stocks, gold, and commodities.
- To understand what is coming at you, you need to understand what happened before you.
- A nation’s greatest war is with itself.
- Earn more than we spend.
- Treat each other well.
Understand: This is how the economic engine works.
Ray Dalio is fantastic here.