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Dalio Changing World Order Charts
Dalio Changing World Order Charts
THE CHANGING
WORLD ORDER
RAY DALIO
This PDF contains the charts and tables from the book for printing and easy reference.
© COPYRIGHT 2021
THE CHANGING WORLD ORDER
CHAPTER 1
1
THE CHANGING WORLD ORDER
World 300
War II
World
War I
Series of Indian Indian 200
famines and
Cocoliztli
epidemics Chinese
famines
War of the China’s
Spanish Napoleonic Great Leap
Succession Wars Forward 100
COVID-19
HIV/
AIDS
0
1500 1600 1700 1800 1900 2000
2
THE CHANGING WORLD ORDER
0.5%
WWII, Holocaust,
communist revolutions
0.4%
0.3%
WWI
Collapse of Ming Dynasty,
religious wars in Europe
0.2%
Time of
Chinese Troubles in European Napoleonic
border Russia monarchic Wars
wars, wars Ethnic wars
religious Wars of Seven in China 0.1%
wars in Religion in Years’ War
Europe France in Europe
0.0%
1400 1500 1600 1700 1800 1900 2000
Based on deaths as a share of the population for the major powers and thus will differ
from the estimate of global conflict deaths shown in the prior chart
Global RGDP Per Capita (2017 USD, Log) USA Equities Cumulative Return
8.80 160
140
120
8.70 ~12% fall
100
80
60
8.60
40
~10% fall 20
8.50 0
1929 1931 1933 1935 1937 1939 1941 1943 1945
3
THE CHANGING WORLD ORDER
Netherlands China
0
1500 1600 1700 1800 1900 2000
4
THE CHANGING WORLD ORDER
THE TOP
5
THE CHANGING WORLD ORDER
10
9 11
8 12
THE TOP
7
13
6
5 14
4 THE RISE THE DECLINE 15
3 16
2 17
New Order 1 18 New Order
6
THE CHANGING WORLD ORDER
Education
Cost Competitiveness
Military Strength
Trade
Economic Output
Resource-Allocation Effi-
ciency
Character/Civility/
Determination
Governance/Rule of Law
Gaps in Wealth,
Opportunity & Values
1
Acts of nature, external order, and geology are not included in cycle analysis. Readings use proxies for determinants with limited history.
7
THE CHANGING WORLD ORDER
Netherlands
Relative Power
United Kingdom United States
China
New New
World World
Order Order
Time
8
THE CHANGING WORLD ORDER
CHAPTER 2
THE DETERMINANTS
Determinant 1 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Determinant 2 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Determinant 3 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Determinant 4 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Determinant 5 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Determinant 6 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Determinant 7 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Determinant 8 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Determinant 9 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Determinant 10 Effect Effect Effect Effect Effect Effect Effect Effect Effect Effect
Etc
9
THE CHANGING WORLD ORDER
ADDITIONAL DETERMINANTS
Favorable Geology Unfavorable
10
THE CHANGING WORLD ORDER
11
THE CHANGING WORLD ORDER
CHAPTER 2
DETERMINANTS ADDENDUM
THE UNIVERSE
HUMANKIND
EMPIRE
COUNTRY
STATE
TRIBE
(i.e., community)
FAMILY
INDIVIDUAL
12
THE CHANGING WORLD ORDER
CHAPTER 3
13
THE CHANGING WORLD ORDER
CHAPTER 4
THE CHANGING
VALUE OF MONEY
100%
War of
1812
Great Depression 80%
60%
Napoleonic WWI
Wars WWII 40%
US Inflationary
Dutch Empire ends/ ’70s
collapse of Bank of Civil War
Amsterdam 20%
0%
1600 1700 1800 1900 2000
SPOT FX VS GOLD
USA GBR DEU FRA ITA
JPN CHE ESP NLD CHN
40%
20%
0%
(4)
-20%
(6) -80%
-100%
1860 1880 1900 1920 1940 1960 1980 2000 2020
14
THE CHANGING WORLD ORDER
1,000
100
10
1
1850 1870 1890 1910 1930 1950 1970 1990 2010 2030
2
0%
Fiscal crisis
in Spain
-20%
2
Due to a lack of data, several charts in this chapter do not show China.
15
THE CHANGING WORLD ORDER
Broad stability
during 1920s 100%
0%
Post-WWI devaluations
and German hyperinflation
-100%
1913 1915 1917 1919 1921 1923 1925 1927 1929
0%
-20%
-40%
-60%
16
THE CHANGING WORLD ORDER
0%
-20%
-40%
-80%
-100%
1966 1968 1970 1972 1974 1976
4%
0%
2%
0%
-50%
-2%
-100% -4%
98 02 06 10 14 18 98 02 06 10 14 18 22
17
THE CHANGING WORLD ORDER
Data for Switzerland is since 1851; data for Germany, Spain, and Italy is since 1870; data
for Japan is since 1882; data for China is since 1926 (excluding 1948–50). Average return is
un-rebalanced and doesn’t include China.
1,000
100
10
1860 1880 1900 1920 1940 1960 1980 2000 2020
18
THE CHANGING WORLD ORDER
16
12
1850 1870 1890 1910 1930 1950 1970 1990 2010 2030
19
THE CHANGING WORLD ORDER
CHAPTER 5
THE TOP
CHN USA
THE RISE THE DECLINE
3 4
THE TOP
2 5
THE RISE THE DECLINE
1 6
3 4
2 5
4 6
3 5
4
3
5 2 6 1
2 61
3 4 3 4 5
2 6 1
3 45 2
5
61
3 4 2 6 1
2 5 1
6
1
20
THE CHANGING WORLD ORDER
(1 = All-Time Max)
2 5 4
5 3 3
1 2 5
2 3 4
6 2
1 6 5
6
1 2
1 6
0
600 800 1000 1200 1400 1600 1800 2000
21
THE CHANGING WORLD ORDER
22
THE CHANGING WORLD ORDER
17% 20%
12% 11%
10%
0%
<40% 40–60% 60–80% >80%
Share of Economic Measures Worse Than Threshold (>1z)
3
3
This chart is based on historical analysis of nine great powers (covering about 2,200 years of history in total). The likelihood of conflict is based on
major cases of civil war, rebellion, and revolution but excludes peaceful revolutions that did not change the existing system. The analysis does not
count the probability of conflict arising in a period when a country is already in the midst of internal conflict (and the five years following) to avoid
counting periods in which economic conditions were bad because of the conflict itself.
23
THE CHANGING WORLD ORDER
24
THE CHANGING WORLD ORDER
CHAPTER 6
World
Wars
Napoleonic 0.2%
Wars
Enlightenment, Pax
capitalism, Britannica,
Industrial Second
Renaissance, Revolution Industrial 0.1%
Age of Revolution EU
Exploration integr-
ation
0.0%
1400 1500 1600 1700 1800 1900 2000
25
THE CHANGING WORLD ORDER
20%
6,500
0%
-20% 5,500
1933 1935 1937 1939 1933 1935 1937 1939
26
THE CHANGING WORLD ORDER
Markets closed
in Germany
and Japan
1.0
27
THE CHANGING WORLD ORDER
CHAPTER 7
Falling
Growth
Assets Falling
Inflation
Assets
28
THE CHANGING WORLD ORDER
1960–70 0% 2% 1% 2% 0% 0% 0% 2% 0%
1970–80 -2% -3% 0% -3% 2% -2% -13% -8% -1%
29
THE CHANGING WORLD ORDER
1900–10 -2% 3% 4% 7% 6% 3% 4% 3% 2%
1950–60
1960–70
1970–80
1980–90
1990–00
2010–20 7% 4% 1% 2% 2% 0%
4
80%
60%
40%
20%
0%
1900 1920 1940 1960 1980 2000 2020
4
For China and Russia, bond data pre-1950 is modeled using hard currency bond returns held as though hedged back to local currency by a domestic
investor; stocks and bonds modeled as full default at time of revolution. Annualized returns assume a full 10-year period even if markets closed during
the decade.
30
THE CHANGING WORLD ORDER
5
Cases of poor asset returns in smaller countries such as Belgium, Greece, New Zealand, Norway, Sweden, Switzerland, and across the emerg-
ing world are excluded from this table. Note that for conciseness the worst 20-year window is shown for each country/time period (i.e., including
Germany in 1903–23 precludes including Germany from 1915–35). For our 60/40 portfolios, we assumed monthly rebalancing across the 20-year
window.
31
THE CHANGING WORLD ORDER
UK
Germany Yes
France
Austria-Hungary
Italy Yes
Netherlands
Japan Yes
Austria-Hungary Yes
Italy Yes
Netherlands Yes
6
While this diagram is not exhaustive, I include instances where I could find clear evidence of each occurring in the 20-year period. For this analysis, wealth
confiscation was defined as extensive seizure of private assets, including large-scale forced, non-economic sales by a government (or revolutionaries in the
case of revolution). Relevant capital controls were defined as meaningful restrictions on investors moving their money to and from other countries and assets
(although this does not include targeted measures directed only at single countries, such as sanctions).
32
THE CHANGING WORLD ORDER
20% 3
9/11
2
10%
1
0% 0
1900 1920 1940 1960 1980 2000 2020
UK 0% 2% 0% 0% 1% 0% 0% 0% 0% 0% 0% 0%
USA 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
China 0% 0% 1% 2% 3% 1% 1% 1% 0% 0% 0% 0%
Germany 0% 3% 0% 9% 15% 0% 0% 0% 0% 0% 0% 0%
France 0% 4% 0% 0% 1% 0% 0% 0% 0% 0% 0% 0%
Austria-Hungary 0% 2%
Italy 0% 2% 0% 0% 1% 0% 0% 0% 0% 0% 0% 0%
Netherlands 0% 0% 0% 1% 2% 0% 0% 0% 0% 0% 0% 0%
Japan 0% 0% 0% 1% 4% 0% 0% 0% 0% 0% 0% 0%
33
THE CHANGING WORLD ORDER
7
Tax impact for 401(k) method applies a 26 percent income tax rate (effective average federal tax rate for top quintile from the Congressional Budget
Office as of 2017) at the conclusion of each 20-year investment period (i.e., tax-free investment growth). Tax impact for brokerage method separately
taxes dividends (at the same 26 percent income tax rate) and capital gains, paying taxes on all capital gains (at a 20 percent rate) from both principal and
dividend reinvestment at the conclusion of each 20-year investment period and netting losses against any gains.
34
THE CHANGING WORLD ORDER
200%
100%
0%
-100%
150%
100%
50%
0%
-50%
1900 1920 1940 1960 1980 2000 2020
35
THE CHANGING WORLD ORDER
0% 4%
Near
lowest
ever -2% 0%
1900 1925 1950 1975 2000 2025 1900 1925 1950 1975 2000 2025
4% 12%
Near 9%
0% lowest
ever 6%
-4% 3%
Lowest
since 0%
WWII -8%
-3%
1900 1925 1950 1975 2000 2025 1900 1925 1950 1975 2000 2025
36
THE CHANGING WORLD ORDER
80 160
60 120
40 80
20 40
Will never get your
0 buying power back 0
00 20 40 60 80 00 20 00 20 40 60 80 00 20
37
THE CHANGING WORLD ORDER
CHAPTER 8
Sweden
Russia
Habsburg
England Low
Countries
German Poland-Lithuania
(non-Habsburg)
Holy Roman
Empire Habsburg
Central
France Europe
Venice
Papal
Genoa States
Portugal Habsburg
Spain Ottoman Empire
Habsburg
Italy
Ming China
Fragmented
smaller states
38
THE CHANGING WORLD ORDER
BOOK/MANUSCRIPT PRODUCTION IN
MAJOR EUROPEAN COUNTRIES (MLN)
600
500
400
Hundreds of millions of
texts produced in each of
the subsequent centuries 300
200
Printing press
100
0
500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800
SILVER PRODUCTION
UK CONSUMER FROM MEXICO AND
PRICE INDEX PERU (METRIC TON)
8,000
1.0
0.0 0
1300 1400 1500 1600 1700 1520 1600 1680 1760
39
THE CHANGING WORLD ORDER
6
Ming-Qing transition
0
1360 1416 1472 1528 1584 1640 1696 1752 1808 1864
40
THE CHANGING WORLD ORDER
CHAPTER 9
0
1500 1600 1700 1800 1900 2000
41
THE CHANGING WORLD ORDER
Rising
Inequality 0.7
Dutch
Rebellion 0.3
& Eighty Thirty Year of War of the
Years’ War Years’ Disaster Spanish Napoleonic
War (1672) Succession Wars
0.2
1550 1600 1650 1700 1750 1800 1850
42
THE CHANGING WORLD ORDER
12% 8%
6%
8%
4%
4%
2%
0% 0%
1400 1500 1600 1700 1800 1900 1400 1500 1600 1700 1800 1900 2000
6%
5%
4%
3%
2%
1400 1500 1600 1700 1800 1900
100
80
60
Spanish coin devalued
massively during the
17th century 40
20
1500 1550 1600 1650 1700 1750 1800
43
THE CHANGING WORLD ORDER
10%
6%
8%
4% 6%
4%
2%
2%
0% 0%
1500 1600 1700 1800 1900 2000 1500 1600 1700 1800 1900 2000
20% 30%
20%
10%
10%
0% 0%
1500 1600 1700 1800 1900 2000 1500 1600 1700 1800 1900 2000
44
THE CHANGING WORLD ORDER
2,000
Spanish decline
1,000
1400 1500 1600 1700 1800 1900
45
THE CHANGING WORLD ORDER
0.6%
0.4%
0.2%
0.0%
1625 1675 1725 1775
18
Limited debasement
after the founding of 15
the Bank of Amsterdam
13
10
5
1550 1600 1650 1700 1750 1800
46
THE CHANGING WORLD ORDER
BANK OF AMSTERDAM
ACCOUNTS AT BANK HOLDINGS (%GDP)
OF AMSTERDAM Deposits Gold and Silver
8%
3,000
6%
2,000
4%
1,000
2%
0 0%
1600 1650 1700 1750 1800 1600 1650 1700 1750 1800
47
THE CHANGING WORLD ORDER
10%
0%
-10%
1600 1625 1650 1675 1700 1725 1750 1775
8
-5
-10
-15
1750 1760 1770 1780 1790 1800
8
This chart only shows the financial results from the Dutch East India Company reported in patria, i.e., the Netherlands. It does not include the parts of
the revenue and debt from its operations in Asia but does include its revenue from goods it sourced in Asia and sold in Europe.
48
THE CHANGING WORLD ORDER
6%
5%
4%
3%
As deposit holders exchange their guilder
for gold and silver, the Bank of Amsterdam 2%
loses its holdings in precious metals
1%
0%
1700 1725 1750 1775 1800
12
Bank of Amsterdam starts to print 10
to save Dutch East India Company
8
0
1775 1780 1785 1790
49
THE CHANGING WORLD ORDER
DUTCH GUILDER
vs Gold vs GBP
1.10
1.00
(A)
(B) 0.90
(C)
0.80
(D)
0.70
1775 1780 1785 1790 1795 1800
(A) Guilder stable through most of the decline era
(B) Fourth Anglo-Dutch War leads to money printing and initial pressure on
the guilder (run on the Bank of Amsterdam)
(C) Short period of stabilization as investors seek safe havens at the start
of the French Revolution
(D) The French overthrow the Dutch; accounts at the bank basically
wiped out
9
BANK OF AMSTERDAM
VALUE OF THE RESERVE RATIO
DUTCH GUILDER (PRECIOUS METAL TO
vs Gold vs Silver vs GBP MONETARY LIABILITIES)
1.6
100%
1.4
1.2 80%
1.0
60%
0.8
Stable during Golden Age
0.6 After the Fourth 40%
0.4 Anglo-Dutch War, there
is a sharp decline in the 20%
0.2 ratio of precious metal to
deposits (as depositors flee)
0.0 0%
1600 1650 1700 1750 1800 1600 1650 1700 1750 1800
9
To fully represent the likely economics of a deposit holder at the Bank of Amsterdam, we assumed depositors each received their pro-rated share of
precious metal still in the bank’s vaults when it closed (that was roughly 20 percent of the fully backed amount, thus the approximately 80 percent
total devaluation).
50
THE CHANGING WORLD ORDER
1,000
100
10
1600 1625 1650 1675 1700 1725 1750 1775 1800
1,000
7%
5%
100
3%
10 1%
1700 1720 1740 1760 1780 1800 1600 1650 1700 1750 1800
51
THE CHANGING WORLD ORDER
Start of various
wars in 1672
0
1600 1650 1700 1750 1800
52
THE CHANGING WORLD ORDER
CHAPTE R 10
Netherlands
Relative Power
United Kingdom United States
China
New New
World World
Order Order
Time
53
THE CHANGING WORLD ORDER
54
THE CHANGING WORLD ORDER
UK ARC 1600–PRESENT
Major Wars United Kingdom Netherlands United States
0.2
Napoleonic WWI &
English Civil War wars Victorian Era WWII Suez crisis
0.1
1600 1650 1700 1750 1800 1850 1900 1950 2000
55
THE CHANGING WORLD ORDER
12%
Massive expansion of fiscal state 10%
8%
6%
4%
2%
0%
1500 1550 1600 1650 1700 1750 1800
8 60%
50%
6
40%
4 30%
20%
2
10%
0 0%
1500 1600 1700 1800 1900 1500 1600 1700 1800 1900
56
THE CHANGING WORLD ORDER
2,000
Spanish decline
1,000
1400 1500 1600 1700 1800 1900
30% 60%
50%
20% 40%
30%
10%
20%
0% 10%
1500 1600 1700 1800 1900 1500 1600 1700 1800 1900
57
THE CHANGING WORLD ORDER
70%
50%
30%
10%
-10%
1700 1720 1740 1760 1780 1800 1820
100%
Currency collapse
accelerates from 10%
1792 to 1796
1%
.1%
.01%
1750 1770 1790 1810 1830 1850 1870
20%
15%
10%
5%
0%
1600 1650 1700 1750 1800 1850 1900 1950 2000
58
THE CHANGING WORLD ORDER
40%
30%
20%
60%
50%
40%
30%
20%
10%
0%
1825 1835 1845 1855 1865 1875 1885 1895 1905
59
THE CHANGING WORLD ORDER
50%
60%
40%
40% 30%
20%
20%
10%
0% 0%
1700 1800 1900 2000 1700 1800 1900 2000
INVENTIONS GDP
(% OF GLOBAL INVENTIONS) (% OF GLOBAL GDP)
USA GBR DEU
50% 30%
Rise of
the US
40%
Steady UK decline
UK declines as US and
Germany catch up 30% 20%
20%
10% 10%
1870 1890 1910 1870 1890 1910 10
10
GBR GDP share includes income of countries controlled by the British Empire.
60
THE CHANGING WORLD ORDER
70%
65%
60%
55%
1800 1820 1840 1860 1880 1900 1920
1%
0%
1870 1913
I
61
THE CHANGING WORLD ORDER
5% 5%
0% 0%
1870 1880 1890 1900 1910 DEU GBR USA
18%
14%
10%
6%
2%
1860 1880 1900
62
THE CHANGING WORLD ORDER
1,000
10%
0 5%
1880 1890 1900 1910 1914 1870 1880 1890 1900 1910
DEU REAL GDP PER CAPITA JPN REAL GDP PER CAPITA
160% 160%
120% 120%
80% 80%
40% 40%
35 37 39 41 43 45 47 49 35 37 39 41 43 45 47 49
63
THE CHANGING WORLD ORDER
40 40
20 20
0 0
35 37 39 41 43 45 47 49 35 37 39 41 43 45 47 49
11
GBP SHARE
GBP SHARE OF GBP SHARE OF GLOBAL
GLOBAL RESERVES OF GLOBAL TRANSACTIONS
(EX-GOLD, EST) DEBT (EST) (EST)
100% 70% 50%
WWII 60%
80% 40%
50%
60% 40% 30%
40% 30%
20%
20%
20% 10%
10%
0% 0% 0%
1900 1960 2020 1900 1960 2020 1900 1960 2020
11
This chart shows the official exchange rate between dollars and deutschemarks as well as an unofficial (black market) rate that was based on actual
transactions between New York and Germany during that time period. The unofficial rate shows that the true value of the deutschemark was col-
lapsing during the period.
64
THE CHANGING WORLD ORDER
10%
0.25
0%
0.35 -10%
-20%
0.45
1930 1940 1950 1960 1930 1940 1950 1960
10%
5%
0%
-5%
-10%
-15%
1930 1940 1950 1960
65
THE CHANGING WORLD ORDER
3% 4%
2%
2% 0%
-2%
1% -4%
-6%
0%
-8%
-1% -10%
60 62 64 66 68 70 60 62 64 66 68 70
USD/GBP (INV)
0.25
0.30
0.35
0.40
0.45
60 62 64 66 68 70
66
THE CHANGING WORLD ORDER
15% 50%
40%
10%
30%
20%
5%
10%
0% 0%
1968 1969 1970 1971 1972 1968 1969 1970 1971 1972
Central banks begin selling their sterling Sterling Agreement countries promise to
reserves following the devaluation. The continue holding pounds, but only if 90
share of the pound collapses. percent of their dollar value is guaranteed
by the British government.
GDP Per Capita (2017 USD, PPP Adj) 41,504 60,236 16,411
*Europe Empire Arc treats major Eurozone countries as single unit for purposes
of comparison.
67
THE CHANGING WORLD ORDER
40,000 110%
30,000 90%
20,000 70%
00 05 10 15 20 00 05 10 15 20
68
THE CHANGING WORLD ORDER
C H A P T E R 11
0
1700 1800 1900 2000
69
THE CHANGING WORLD ORDER
US ARC 1750–PRESENT
Major Wars United States United Kingdom China
Mexican- 0.2
American
American Louisiana War Gilded Age &
Revolution Purchase Progressive Era WWI WWII Cold War
0.0
1750 1800 1850 1900 1950 2000
100
90
80
1910 1911 1912 1913 1914 1915 1916 1917 1918 1919
70
THE CHANGING WORLD ORDER
10,000
1,000
100
10
1
1945 1965 1985 2005
71
THE CHANGING WORLD ORDER
16% 16%
12% 12%
8% 8%
4% 4%
0% 0%
45 55 65 75 85 95 05 15 45 55 65 75 85 95 05 15
600
-600
72
THE CHANGING WORLD ORDER
New 100%
World Order
60%
20%
1900 1920 1940 1960 1980 2000 2020
73
THE CHANGING WORLD ORDER
70%
40%
60%
30%
50%
20%
40%
30% 10%
20% 0%
1920 1970 2020 1920 1970 2020
More 50%
-10% conservative
40%
-20%
Greatest 30%
gap
-30% 20%
Less 10%
-40% conservative
0%
1900 1920 1940 1960 1980 2000 2020
74
THE CHANGING WORLD ORDER
90%
80%
70%
60%
1790 1830 1870 1910 1950 1990 2030
UNITED STATES
USA Unemployment Rate USA CB Balance Sheet (%GDP)
30% 40%
30%
20%
20%
10%
10%
0% 0%
00 20 40 60 80 00 20 00 20 40 60 80 00 20
75
THE CHANGING WORLD ORDER
EUROPE
EUR Unemployment Rate EUR CB Balance Sheet (%GDP)
14% 70%
12% 60%
10% 50%
8% 40%
6% 30%
4% 20%
2% 10%
0% 0%
00 20 40 60 80 00 20 00 20 40 60 80 00 20
UNITED KINGDOM
GBR Unemployment Rate GBR CB Balance Sheet (%GDP)
25% 50%
20% 40%
15% 30%
10% 20%
5% 10%
0% 0%
00 20 40 60 80 00 20 00 20 40 60 80 00 20
76
THE CHANGING WORLD ORDER
JAPAN
JPN Unemployment Rate JPN CB Balance Sheet (%GDP)
8%
120%
6%
80%
4%
40%
2%
0% 0%
00 20 40 60 80 00 20 00 20 40 60 80 00 20
12
12
Shading indicates degree of polarization.
77
THE CHANGING WORLD ORDER
C H A P T E R 12
0
1500 1600 1700 1800 1900 2000
78
THE CHANGING WORLD ORDER
RC PRC 1
Level Relative to Other Empires
Tang Song Yuan Ming Qing
Dynasty Dynasty Dynasty Dynasty Dynasty
(1 = All-Time Max)
0
600 800 1000 1200 1400 1600 1800 2000
79
THE CHANGING WORLD ORDER
Type 1
Type 2
Type 3
10%
0%
1750 1775 1800 1825 1850 1875 1900 1925 1950 1975 2000 2025
13
I produced this diagram working with Professor Jiaming Zhu.
80
THE CHANGING WORLD ORDER
2
4,000
4
8,000
Up = stronger Up = stronger
RMB 6 RMB
12,000
8
10 16,000
1920 1970 2020 1920 1970 2020
81
THE CHANGING WORLD ORDER
Avg Yrs of Education 1.7 4.4 7.9 +6.2 Yrs +3.5 Yrs
82
THE CHANGING WORLD ORDER
Average Years
11.9 13.6 +1.7 +14% 4.6 7.9 +3.3 +72%
of Schooling
Govt Spending
on Education 5.30% 5.50% 0.20% +4% 1.90% 5.20% 3.30% +174%
(% of GDP)
Est Population w/
Tertiary Education 25 60 +35 +140% 3 120 +117 +3,900%
(Mln)
Population w/
Tertiary Education 17% 28% 11% +68% 1% 12% 11% +2,272%
(% Working-Age Pop)
Population w/
Tertiary Education 35% 15% -20% -57% 4% 31% +27% +590%
(% World)
STEM Majors (% World) 29% 11% -18% -62% 5% 31% +26% +535%
83
THE CHANGING WORLD ORDER
CH A P T E R 13
US-CHINA RELATIONS
AND WARS
EUR 20%
Gold 12%
JPY 6%
GBP 5%
CNY 2%
84
THE CHANGING WORLD ORDER
C H A P T E R 14
THE FUTURE
8,000 8,000
6,000 6,000
4,000 4,000
2,000 2,000
0 0
1500 1600 1700 1800 1900 2000 1900 1920 1940 1960 1980 2000 2020
Collapse 15%
WWII 15%
Thirty of Ming
Years’ Dynasty Industrial 10%
War Revolution WWI
Baby Boom 10%
5%
0% 5%
WWI WWII
-5% 0%
1500 1600 1700 1800 1900 2000 1900 1920 1940 1960 1980 2000 2020
85
THE CHANGING WORLD ORDER
Baby 60 60
Thirty Boom
Years’ Third Plague 50 Baby 50
War pandemic Boom
40 40
WWII WWII
30 30
Flu WWI, WWI,
1557 influenza outbreak Spanish flu 20 Spanish flu 20
pandemic & famine pandemic pandemic
10 10
1500 1600 1700 1800 1900 2000 1900 1925 1950 1975 2000 2025
14
14
Importantly, a number of the charts shown on these pages rely on the record from fewer countries further in the past, due to limited reliable data
history. Life expectancy prior to the 1800s is solely based on Great Britain (marked by the dotted line). Global RGDP is primarily a mix of European
countries before 1870. And there are not good records of total wealth prior to the 1900s, so I can’t show you the picture before then.
86
THE CHANGING WORLD ORDER
2008
-5% financial -4%
crisis
WWI COVID-19
-10%
Panic WWI
of 1819 -8%
Great -20%
Depression
2008
Anglo-French crisis -12%
War WWII 10% Great WWII
Dutch Revolt COVID-19 Depression
against Spain
-25% -16%
1500 1600 1700 1800 1900 2000 1900 1920 1940 1960 1980 2000 2020
-10%
1970s
stagflation
2008 financial
crisis -20%
Great
Depression
-30%
WWII
Collapse of Qing,
WWI, Russian Revolution,
and Spanish flu
-40%
1900 1920 1940 1960 1980 2000 2020
87
THE CHANGING WORLD ORDER
250
Indian 200
famine
Cocoliztli
epidemics Series of
Indian 150
famines Indian and
Chinese
famines China’s
Great Leap
Forward 100
Russian COVID-19
famine
HIV/ 50
French AIDS
famine
0
1500 1600 1700 1800 1900 2000
88
THE CHANGING WORLD ORDER
0.5%
WWII, Holocaust,
communist
revolutions
0.4%
0.3%
WWI
0.0%
1400 1500 1600 1700 1800 1900 2000
15
Arrows denote the 20-year change in the gauge.
89
THE CHANGING WORLD ORDER
-1
-2
USA ESP GBR FRA JPN EUR IND CHN NLD RUS DEU
50%
40%
30%
20%
10%
0%
USA EUR JPN GBR CHN RUS IND
16
16
Individual European countries are not shown on the reserve currency status gauge due to the European Monetary Union (all these countries use
the euro)—so only the Europe aggregate is shown. The measure shows an average of what share of global transactions, debts, and official central bank
reserve holdings are denominated in each country’s currency.
90
THE CHANGING WORLD ORDER
-1
91
THE CHANGING WORLD ORDER
4
2
3
1
2
1 0
0
-1
-1
-2
-2
-3 -3
1780 1840 1900 1960 2020 1780 1840 1900 1960 2020
0.8
0.4
0.0
-0.4
-0.8
USA GBR GBR USA USA CHN CHN USA USA
JPN DEU JPN GBR DEU JPN GBR RUS CHN
92
THE CHANGING WORLD ORDER
0.4
0.0
-0.4
-0.8
-1
-2
USA CHN RUS EUR IND JPN FRA GBR DEU ESP NLD
93
THE CHANGING WORLD ORDER
Spanish flu
1,200
Indian 1,000
famine
800
Cocoliztli
epidemics 600
Series of
Indian Indian and
famines China’s
Chinese Great Leap 400
famines Forward
Russian French
famine famine
COVID-19 200
HIV/
AIDS
0
1500 1600 1700 1800 1900 2000
0.0
-0.5 310
94
THE CHANGING WORLD ORDER
200
150
100
50
0
1970 1980 1990 2000 2010 2020
300
250
200
150
Hurricanes 100
Japan, NZ Harvey,
Hurricane earthquake Irma, 50
Katrina Maria
0
1970 1980 1990 2000 2010 2020
95
THE CHANGING WORLD ORDER
96
THE CHANGING WORLD ORDER
Debt Burden
Good -1.8 0.3 -0.3 1.6
(Big Economic Cycle)
Expected Growth
Good -0.7 0.4 -1.0 -1.0
(Big Economic Cycle)
Internal Conflict
Good -2.0 0.2 0.4 0.7
(Internal Order; low is bad)
97
THE CHANGING WORLD ORDER
GAUGE
JPN IND GBR FRA
QUALITY
Debt Burden
Good -0.4 0.1 -1.6 -0.8
(Big Economic Cycle)
Expected Growth
Good -1.1 1.1 -0.8 -0.9
(Big Economic Cycle)
Internal Conflict
Good 1.1 -0.3 -0.1
(Internal Order; low is bad)
98
THE CHANGING WORLD ORDER
GAUGE
NLD RUS ESP
QUALITY
Debt Burden
Good 0.8 1.0 -1.7
(Big Economic Cycle)
Expected Growth
Good -0.8 -0.2 -1.1
(Big Economic Cycle)
Internal Conflict
Good 1.2 -0.5 -0.4
(Internal Order; low is bad)
99
IND
IDR
CHN
CZK
CHE
USA
CAN
NLD
BEL
GBR
ARG
PRT
FRA
NOR
DEU
JPN
ESP
ITA
GRC
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
THE CHANGING WORLD ORDER
APPENDIX
101
THE CHANGING WORLD ORDER
Somewhat
Economic/Financial Position 0.4 3
Favorable
Debt Burden Low Debt 0.3 4
Expected Growth 4.3% 0.4 2
Internal Order Moderate Risk -0.1 7
Wealth/Opportunity/Values Gap Relatively Large -0.4 8
Internal Conflict Average 0.2 5
External Order At Risk
102
THE CHANGING WORLD ORDER
Moderately
Economic/Financial Position -0.9 6
Unfavorable
Moderately
Debt Burden -0.3 6
High Debt
Expected Growth 0.3% -1.0 8
Internal Order Low Risk 0.3 5
Wealth/Opportunity/Values Gap Typical 0.3 6
Internal Conflict Average 0.4 4
External Order
103
THE CHANGING WORLD ORDER
Somewhat
Economic/Financial Position 0.4 4
Favorable
Debt Burden Low Debt 1.6 1
Expected Growth 0.3% -1.0 9
Internal Order Low Risk 0.7 3
Wealth/Opportunity/Values Gap Narrow 0.7 3
Internal Conflict Low 0.7 3
External Order
104
THE CHANGING WORLD ORDER
105
THE CHANGING WORLD ORDER
106
THE CHANGING WORLD ORDER
107
THE CHANGING WORLD ORDER
108
THE CHANGING WORLD ORDER
109
THE CHANGING WORLD ORDER
110
THE CHANGING WORLD ORDER
111