What I’m Learning – The Changing World

Thanks for reading this week of What I’m Learning where I essentially just funnel the things I’m learning into a newsletter. It not only helps solidify the topics in my mind, but it turns out that it is great to connect with awesome people!

If you enjoy reading this, please share it with someone you think would be interested! 


Here is the link: https://drewalbertmd.com/what-im-learning-newsletter/

What I’ve Been Reading

I believe that economics can really help with decision making. My interest in economics has been rekindled since listening to Ray Dalio’s book, Principles. He discusses how he has studied how all levels of the economy works across the world and through history. Seeking lessons from history is something that is highly undervalued in our educational system and is also something I have been trying to learn more about. Dalio is on a mission to figure out how the world works and to gain timeless and universal principles for dealing with it well. In my opinion we should all be doing this and at the very least trying to learn from people who are!


Here is the one of the essays Ray Dalio published on the changing world order and how macroeconomics are shaping the world we live in. Here are some highlights. 

The Changing World Order by Ray Dalio

  • Human productivity is the most important force in causing the world’s total wealth, power, and living standards to rise over time.

  • Productivity or output per person is driven by learning, building and inventiveness.

  • There are forces that affect society’s productivity and learning that often happen in cycles.

  • Of these cycles, the debt cycle, money and credit cycle, the wealth gap cycle, and the global geopolitical cycle are the most important to understand to put things into perspective.

  • The formula for success has been a system in which educated people come up with innovations, receive funding through capital markets, and own the means by which their innovations are turned into production and are rewarded through profits.

  • Most turbulent times throughout this increase in productivity seen in RGDP per Capita, is from money and credit collapses, big wealth gaps, fighting over wealth and power, and severe acts of nature.

  • Societies that have large savings, low debts and a strong reserve currency can withstand economic and credit collapse better than those who don’t.

  • Those that are more inventive will adapt better than those who are less inventive.

  • Credit and spending collapse is from over-borrowing to bet heavily on things going up and being hurt when they go down.

  • Past economic and market declines each lasted about 3 years until they were reversed by big restructuring processes of debt, taxation, spending, politics and the monetary system. There are shifts in wealth and power that occur.

  • Measures of wealth and power include: Education, competitiveness, technology, economic output, share of world trace, military strength, and financial center strength, and reserve currency. Below is the rise and fall of these factors relative to an empires peak and decline.

  • Decline happens when debts become very large and central banks lose their ability to stimulate economic growth which leads to more money printing and currency devaluation.

  • Wealth gaps increase and probability of conflict between rich and poor increase, which also leads to political extremism.

  • The rich fear their money will be taken so they move their money to assets they feel are safer. This reduces tax and spending revenue which worsens conditions. Governments eventually limit the movement of money causing a cycle of conflict that leads to fighting and decreased productivity shrinking the economy. Democracy becomes threatened by autocracy.

  • When this happens countries with enough power challenge the existing dominant power.

  • Shifts in power when costs outweigh what it takes to maintain power and a strong economy. Acts of nature (droughts, floods…etc) can contribute to the self-reinforcing downward spiral.

  • Upward productivity is from prosperous periods of building, through relatively low levels of debt, small wealth, values and political gaps, people working together to produce prosperity, good education and infrastructure, strong and capable leadership. When growth is taken to excess it leads to periods of destruction and restructuring. 

  • Dalio made this chart to show the factors that make cycles of rising and declining empires occur.

I would highly encourage reading the rest of the The Changing World Order article, to see where the United States ranks and where we are at in regards to the economic cycle. It is helpful to understand Dalios view on debt cycles discussed in his video, How the economic machine works, in case you haven’t seen it yet.

What I’m listening to:

The Accidental Super Power by Peter Zeihan.

Peter Zeihan is a geopolitical analyst and this book has some unique insights into what factors lead to the wealth of different nations. He discusses how geography, geopolitical climates, deep water navigation, and the industrial age shaped the modern era. I’m about ~4-5 hours in so far with 8 hours to go, so I will be sure to write more about this in the future. 


I originally heard about this book from thetwentyminuteVC podcast. I believe it was the episode where Harry interviewed Rahul Vohra, the Founder and CEO of SuperHuman. If you’re looking for book recommendations, each podcast guest is asked what their favorite book is.  

Orthopedic Surgery

Great journal article on amino acid supplementation and early recovery following total knee arthroplasty. Check it out!

 

If you enjoyed reading this, please share it with someone you think would be interested! 

 

Here is the link: https://drewalbertmd.com/what-im-learning-newsletter/

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