#BookClub: The Changing World Order – Why Nations Succeed and Fail

Nothing is forever other than evolution.
The Changing World Order
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The times ahead will be radically different from those we’ve experienced in our lifetimes. Because they always have been, though similar to many times in history. Within evolution, there are cycles that are like tides that come in and go out and that are hard to change or fight against. To handle these changes well, it is essential to know what part of the cycle we are in and to know timeless and universal principles for dealing with them. Anyone who studies history can see that no system of government, no economic system, no currency, and no empire lasts forever, yet almost everyone is surprised and ruined when they fail.

As conditions change, the best approaches change – what is best depends on the circumstances and the circumstances are always changing. Educate, Evolve, and Transform: What Krishna taught Arjuna in Bhagavad Gita, and ancient Indian philosopher Chanakya epitomized in his teachings.

Famous billionaire investor and hedge fund manager Ray Dalio’s book is inspired by his observation of a number of big developments that hadn’t happened before in his lifetime but had occurred numerous times in history. These events happened many times throughout history and were parts of a cycle of rises and de-clines of empires and most aspects of empire.

The test of any system is simply how well it works in delivering what most of the people want. The lesson from history that comes through most loudly and clearly is that skilled collaboration to both grow and divide the pie well, so that most people are happy, is much more rewarding and much less painful than fighting civil wars over wealth and power that lead to one side subjugating the other side.

From the Book

“The most important thing for currencies to devalue against is debt… Debt is a promise to deliver money,”

“This Big Cycle produces swings between 1) peaceful and prosperous periods of great creativity and productivity that raise living standards a lot and 2) depression, revolution, and war periods when there is a lot of fighting over wealth and power and a lot of destruction of wealth, life, and other things we cherish.”

“When the cycles align, the tectonic plates of history shift, and the lives of all people change in big ways. These shifts will sometimes be terrible and sometimes terrific. They certainly will happen in the future, and most people will fail to anticipate them. In other words, the swinging of conditions from one extreme to another in a cycle is the norm, not the exception.”

“History shows us that the best internal systems/orders depend on the circumstances at the time. For that reason it is a mistake to rigidly believe that any economic or political system is always best because there will certainly come times that that system is not best for the circumstances at hand, and if a society doesn’t adapt it will die.”

“Favoring short-term enjoyments over long-term health naturally exaggerates the highs and the lows of the cycle. That happens in many ways, most obviously by creating debt boom and bust cycles.”

“When they reach their debt limits, (they can’t print as much as they need), spending has to contract to the level of income, so budgets need to be cut and/or taxes have to rise. This leads to political problems and a host of other problems. Most importantly the place becomes less desirable to be in for those who are taxed.”

About the author: Ashok Jainani
Ashok Jainani
(MA, MBA) is an independent market strategist and investment professional on devising multi-asset class market strategies and also advises on branding and corporate strategy. He uses proprietary trading tools in formulation of investment strategies using macro-economics, fundamental and technical analysis. He is also involved with a large social infrastructure project. He has wide academic knowledge in behavioral psychology, economics and financial markets and professional wisdom acquired over 29 years working in various capacities with well-known institutions, including UTI, SHCIL, The Economic Times and Mumbai-based stock brokerages heading research and market strategy. His periodic reports have been accessed by US Federal Reserve, has been interviewed by business channels and his views and articles have appeared in local and foreign media. He led an analyst team at a Mumbai brokerage to win ET-NOW StarmineThomsonReuters Awards and ZEE Business Awards 2009. A guest faculty at leading management institutes, he is widely travelled and visited several factories across diverse industries. Authored book titled Market Myths; MacMillan Publishers India (May 2011).Author can be reached at [email protected]

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