Can the public debt of major countries threaten our collective well-being? Are there limits to debt growth? Can a large country with a major reserve currency like the United States really go bankrupt? And what would such a scenario look like? These are some of the questions underlying the alarm raised for the global economy in this volume.
Ray Dalio, one of the greatest investors of our time, who predicted the 2008 global financial crisis and the 2010-2012 European debt crisis, shares for the first time his detailed explanation of what he calls the “Big Debt Cycle.” Understanding this cycle is essential to help policymakers, investors, and the general public understand where we are and in which direction we are heading. Dalio’s model points to surprisingly simple solutions for managing the debt problems that the United States, Europe, Japan, and China are facing today.
How countries go broke shows how these problems are connected to other forces–domestic politics in various countries, geopolitical relations, natural changes (droughts, floods, and pandemics), and technological changes (especially AI)–which together are causing what Dalio calls great cycle upheavals in the world order.