“Those that fail to learn from history are doomed to repeat it." — Winston Churchill

Diving into Principles for Dealing with The Changing World Order: Why Nations Succeed and Fail by Ray Dalio, published in 2021, has been an educational and enlightening read. Dalio shares his learnings in charts and graphs to show us how the world has evolved through 500 years of history. He identifies patterns and key phases in a new world order and pinpoints crucial events that signify the start of a world order’s decline.

One of my takeaways from the book is that the country at or near the peak of its power owns the world’s reserve currency. For example, the US is used as the world’s reserve currency today. Still, this status shows the first signs of wavering, as the country has displayed several traits that Dalio has identified as the signs of a sunsetting world order.

Having lived in North America for most of my life, it has taken more than a year for me to slowly realize that the signs have been popping up around us for the past several years already.

Here are some of the traits oF A WORLD POWER IN DECLINE

• Large income, wealth, and health gaps. This leads to class warfare, and this is especially evident during Trump’s rule.

• Populist, extremist leaders. Leaders with strong personalities who claim to fight for the people. Again, we only need to look to recent events, such as the events of January 6th, to see what populist leaders are capable of.

• Loss of truth in the public domain. With deep fake news and sensationalized news headlines instead of factual ones, how can you tell what’s real news anymore?

• Increased taxation on the haves versus the have-nots leads to a hollowing-out process. Canada just introduced its federal budget for 2023, again raising taxes on the country's highest earners and large corporations. The point isn’t whether it’s fair or not; it’s what kinds of actions such policies will trigger—likely pushing high earners to leave for better tax havens. With larger deficits expected in the next five years, who’s to say these tax rates won’t continue increasing?

The book illustrates all of this in much greater detail. I also purchased Dalio’s book Principles for Navigating Big Debt Crises as I went down a rabbit hole of world history and hungered to explore past financial crises and the lessons learned. I would suggest that you pick up a copy to educate yourself on the history of past world orders and how they came to power and eventually lost their power, from the Germans to the British and now the United States; it’s eye-opening when history lessons are paired with numerical charts to show you the numbers.