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Lawrence (Lance) Cantor
RAY DALIO’s AMERICA -
The Changing Odds of a Great Conflict in America
Thanks Tommy, Jan, and Sandra for the nice anti-Trump YouTube…I had a good chuckle!
Although humorous as political sarcasm, it is deadly serious in redefining the deep divide in the USA…and the underlying stakes of an emerging Civil War… deferred only by last week’s failed assassination of Donald Trump.
If the bullet had found its target…there would be blood in the streets in every city across the USA.
Ray Dalio explains how it is imminent in the coming months:
As you might remember, I believe that there are five major forces shaping our world:
.Debt/money/economy force
.Internal order and disorder force due to wealth and values differences
.External order and disorder force (due to the great power conflicts that occur when the dominant power is no longer dominant)
.Force of nature (droughts, floods, and pandemics, with climate change now being the biggest force)
.Man’s inventiveness, especially of new technologies (with AI now being the most important one).
They appear to be taking us into a time of great disorder.
I have a template for understanding these forces and comparing current events to historical patterns. Right now, I think the biggest risk in 2024 is domestic disorder, which could significantly impact the other forces and increase internal conflict.
The Changing Odds of a Great Conflict in America
Founder, CIO Mentor, and Member of the Bridgewater Board
July 23, 2024
This post was originally published yesterday in TIME. As events are moving quickly, I have updated it slightly below.
As I have written previously, based on my study of history, America is approaching the point in the big cycle of internal order/politics where people should be prepared for the arrival of increased conflict, potentially even some form of civil war. The last month has brought about a number of important developments, so I’m sharing this new post to update you on how the odds of conflict are shifting and what we might anticipate in the weeks and months ahead.
But before I get into what I think, I want to make it clear that
1) I am painting the picture as I see it now, albeit with what some might call an exaggerated vividness, and that
2) I am not giving you my assessment of the good and bad of the players or telling you what I think they should do. I am trying to paint a vivid and accurate picture of what is now happening and show it within a historical context because I see it as one of the great historical dramas that have repeatedly happened for logical, but seemingly crazy, reasons throughout history.
Also, I truly believe that it would be a presumptuous mistake for me to cloud the picture with my own judgments and give opinions about what others (whose shoes I am not in) should do. At other times, but not now, I will describe how I assess people and their actions, and when I do that, I will be equally clear that I am just sharing my own opinions.
The Developments That Have Changed the Tactical Picture but Not the Strategic Direction
A lot has changed in the last month as a result of the debate, the assassination attempt, the Republican convention, and President Biden dropping out of the race.
Most importantly they are:
The debate undermined the people's trust in President Biden's capabilities and the forthrightness and capabilities of the Democratic Party. Many people were asking: how could the Democrats have hidden Biden's condition and its implications for his presidency and why didn’t they have the strength and forthrightness to deal with the situation swiftly and well? 'Is this bad management that is representative of how they run things?' is now commonly asked.
The assassination attempt brought the country a quarter of an inch away from some type of civil war. Chaos would have occurred because of anger and violence being in the air at the same time as the leaders of both parties would have been out of the picture, so there would have been no clear path to agreeing on the country's leadership. Instead, "by a miracle," Trump and the country appeared "touched by God" to some and Trump appeared a strong fighter to most everyone. The contrast with the frail President Joe Biden was striking.
The Republican convention conveyed a picture of a united, strong, and thoughtful common man’s nationalistic and fundamentalistic party rather than a Republican Party that a few weeks before appeared made up of both a) “unhinged extremists” and b) “old-school rich elitists and businessmen who would keep doing what they have been doing which has led us to where we now are."
At the convention, Trump was clearly adored by the Republicans around him and he even appeared lovable to many viewers. The pictures of him in the booth with his family and granddaughter smiling on his lap and so many other images throughout the convention, engendered feelings, among some viewers, that he was a likable demi-God to be carried on the people's shoulders into leadership for God and country.
These developments reduced the odds of a close and contested Trump-loss scenario, which is the highest risk scenario for some type of civil war, and shifted in favor of a big Republican-Trump win followed by a dominant and controlling Republican-Trump government.
However, while the odds of a close Trump loss have gone down, they haven't gone to zero and, it should be recognized that if a close Trump loss occurs the odds of a big fight happening are even higher because the Democrats denying Donald Trump the presidency would be, to many Republicans, akin to Democrats preventing the second coming of Christ.
Now, attention shifts to the Democrats which brings us to the fourth big development:
President Biden dropping out of the race for president has left the Democrats with choices between "the coronation" path (Biden and the party anointing Harris as the nominee) or the "mini-primary" path (having the leading candidates fight it out for the nomination). How the factious sides of the Democratic Party handle this will be an important test and will determine whether the race will be close this fall. The Democrats have quickly gathered around Kamala Harris, but we will see whether they will be as unified as the unified Republicans.
The bigger picture is that we can be confident that the country will remain deeply divided by irreconcilable differences and the biggest question that will remain until after the election is whether the domestic order in which election results and the tripartite constitutional system of rules will be respected in the face of seemingly irreconcilable differences.
The developments of the last month have moved the odds in favor of the election of Trump-led, ultra-conservative, nationalist, protectionist, isolationist, God-fearing administration which Republicans will certainly accept and Democrats will probably accept reluctantly. This reduces the likelihood of a contested election-prompted civil war, but it is not a sure outcome and if the Democrats are able to manage the transition of candidates well and Trump loses as a result, it is probable that we will see some form of civil war. By the way, the markets are increasingly reflecting this shift.
It's the Ideology, Not the Person, that Matters
While a lot of attention is being given to who the candidates are and how much they are liked, it's important to realize that they are more representative of ideologies (i.e. either moderate or hard left or moderate or hard right) and that the votes will be more for or against those ideologies than the people. You can see and easily anticipate how people are lining up behind the candidates by knowing how they would make that choice.
For example, it is clear that the urban, liberal globalists are lining up against the rural, conservative, God-fearing nationalists; more than it's simply Trump supporters lining up against Harris and her supporters.
It is now pretty clear what Trump and the Republicans are for: they are hard-right. People say they don't know what Kamala Harris is for because we haven't seen her stress-tested, but it won't matter much because people know that she is left of center--and based on who is supporting her (as well as what she has said), people will be inclined to assume that she is pretty left of center.
Knowing how politics works, one might assume that to capture the most votes possible she will be inclined to pick an obviously more moderate running mate who will help in the swing states by sounding more moderate than extreme left.
However, that won't change the fact that the election battle will be between the definitively hard right and some vaguely defined left. You can see how people are now lining up along those lines, and I suspect that, when you make your choice, it will be on that basis.
To repeat, what I am sharing is just the state of play as I see it. Stay tuned.
May you live in interesting times and have good principles for dealing with them.
PS- This analysis is my own and isn't a reflection of the views of Bridgewater.
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