The 5 Forces Impacting the World Order

Your analysis of economic historical events is based on five forces, and I'd really like to start this conversation by getting you to just quickly summarize those five forces.

Okay, uh, just to give you a little bit of background, I um, I'm a global macro investor, and what I learned through my experiences is some of the times that I was surprised is because things didn't happen in my lifetime. But I found out they happened in the past, in history.

So, the three big forces that really drew my attention to studying the rises and declines of reserve currencies and empires were: first, the amount of debt creation and the amount of money creation and the whole impact of debt and money on the economy. The magnitudes are unprecedented, except you have to go back to the 30 to 45 period, and it happened many times in history.

The second is the amount of internal conflict, particularly the development of populism on both extremes due to the largest wealth and values gaps that we have. A populist is an individual who will fight and win at all costs, including the system. So, I never saw that before, and I needed to go back. I knew it existed in the 30 to 45 period and needed to go back and study it.

The third force, of course, is the great power conflict internationally. You know, we had our world order begin in 1945 at the end of World War II. Then there's a new way of doing things. The United States was the dominant world power, had 50% of world GDP, 80% of the world's money—gold was money then and had a monopoly. So, they determined how things would go pretty much.

And then, of course, now we have the great power conflicts and so on. So those three things, last time they happened, were in the 1940 to 45 period. I wanted to go study them in the past.

In doing that study over the last 500 years, I have a fabulous research team that can do this. In doing it over the 500 years, I saw that two other things popped, um, uh, maybe more important, comparably important, was um, acts of nature: droughts, floods, and pandemics. So, climate became a big issue, and of course, climate is a big force of our time. Because no matter what is done or not done, it's going to be very costly. So, it's certainly an economic issue.

And then number five was technology, the changes in technology. So, those five forces I, uh, saw, and I realized how they interrelate with each other to create this big arc. And so, it's like watching the movie happen over the same time, over and over again, and it's a great framework for looking at history.