[2]For example, in the last century, the wealth share of the top 1% in the US ranged from close to 50% in the 1920s to a bit over 20% in the late 1970s; in the UK, it ranged from over 70% in 1900 to around 15% in the 1980s and is around 35% currently (figures from World Inequality Database). These shifts in inequality can be seen at least as far back as the Roman Republic and Empire, as Walter Scheidel describes in The Great Leveler. [3]Aristotle, Politics, IV.11 (translated by Stephen Everson) [4]That doesn’t mean that those who run autocracies don’t ultimately report to the people, because the people could ultimately overthrow the government. [5]Actually I’m writing this advice for my grandchildren so that they can get it when they are older and I’m not here. [6] Source: World Inequality Database [7] Source: World Inequality Database [8] Based on data from voteview.com Bridgewater Daily Observations is prepared by and is the property of Bridgewater Associates, LP and is circulated for informational and educational purposes only. There is no consideration given to the specific investment needs, objectives or tolerances of any of the recipients. Additionally, Bridgewater's actual investment positions may, and often will, vary from its conclusions discussed herein based on any number of factors, such as client investment restrictions, portfolio rebalancing and transactions costs, among others. Recipients should consult their own advisors, including tax advisors, before making any investment decision. This report is not an offer to sell or the solicitation of an offer to buy the securities or other instruments mentioned. 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While we consider information from external sources to be reliable, we do not assume responsibility for its accuracy. The views expressed herein are solely those of Bridgewater as of the date of this report and are subject to change without notice. Bridgewater may have a significant financial interest in one or more of the positions and/or securities or derivatives discussed. Those responsible for preparing this report receive compensation based upon various factors, including, among other things, the quality of their work and firm revenues. Chapter 9 Delving into the Six Stages of the Internal Cycle with a Particular Focus on the US Now Published 12/04/20 Internal orders typically (though not always) change through a relatively standard sequence of stages, like how a disease progresses. By looking at their symptoms we can tell what stages they are in. For example, just as Stage 3 cancer is different from Stage 4 cancer in ways defined by different conditions that exist and have come about as a result of things that happened in prior stages, the same is true for the different stages of the big internal order/disorder cycle. Like diseases, different conditions warrant different actions to address them and they produce a different range of probabilities that those actions will produce. For example, an old, unhealthy set of circumstances produces a range of possibilities and warrants different actions than a young, healthy set. As with cancer, it is best to stop the progress before getting into the later stages. Below is the list of measures of health that I first passed along to you in Chapter 1. Most of these measures of health can be quantitatively measured to create a country’s health index. When the ratings of each of these items are strong/good (i.e., on the left side of the continuum) the health is strong/good and the period ahead is much more likely to be strong/good; when the ratings of these items are weak/bad, the condition of the country is weak and the period ahead is more likely weak/bad. The dimensions that we are measuring the strengths of are the most important determinants of total strength. In this chapter we will examine how these conditions together define a stage, so one will be able to look at the conditions that exist to tell what stage a country is in and then come up with a prognosis. In the concluding chapter of this book, which is on the future, I will show each country’s ratings for each of these measures, as well as use them in my attempt to explore what might be ahead. For now I just want to convey the concepts. These strengths evolve together in archetypical ways to create the stages of the archetypical cycle. By using markers of them, we can identify where in the cycle each country, state, and city is and form our expectations of what the probabilities of different next developments will be based on the conditions at hand. In the following