Thread by @RayDalio

I want to elaborate on the common tactics used when economic and capital tools are weaponized. They have been and still are:

1. Asset freezes/seizures: Preventing an enemy/rival from using or selling foreign assets they rely on. (1/8)

These measures can range from asset freezes for targeted groups in a country (e.g., the current US sanctions of the Iranian Revolutionary Guard or the initial US asset freeze against Japan in World War II) to more severe measures like unilateral debt repudiation or (2/8)

outright seizures of a country’s assets (e.g., some top US policy makers have been talking about not paying our debts to China). (3/8)

2. Blocking capital markets access: Preventing a country from accessing their own or another country’s capital markets (e.g., in 1887 Germany banned the purchase of Russian securities & debt to impede Russia’s military buildup; the US is now threatening to do this to China).(4/8)

3. Embargoes/blockades: Blocking trade in goods and/or services in one’s own country and in some cases with neutral third parties for the purpose of weakening the targeted country or preventing it from getting essential items (5/8)

(e.g., the US’s oil embargo on Japan and cutting off its ships’ access to the Panama Canal in World War II) or blocking exports from the targeted country to other countries, thus cutting off their income (e.g., France’s blockade of the UK in the Napoleonic Wars). (6/8)

If you’re interested in seeing how these tactics have been applied from 1600 until now, they are available at economicprinciples.org. (7/8)

This principle comes from the chapter in my new book on the cycles of order and disorder in the world. If you’re interested, you can read more here: amazon.com/Changing-World… #changingworldorder (8/8)