American billionaire and founder of Bridgewater Associates, Ray Dalio, declared that the post-war world order has effectively collapsed. He said humanity has entered a period of “great disorder”, where traditional rules no longer apply, and international relations are increasingly guided by “might makes right.”
In a new LinkedIn essay, Dalio explained the current global situation using his “Grand Cycle” model, which tracks the rise, prosperity, and decline of dominant empires. He noted that the world is now in Stage 6, a phase marked by instability and the clash of major powers.
Dalio described Stage 6 as a period when great disorder arises due to the absence of rules, the dominance of might, and intense competition between powerful nations.
Comparisons with the 1930s
Dalio drew parallels between today’s geopolitical climate and the 1930s, when debt crises, protectionist policies, political extremism, and rising nationalism preceded World War II. He emphasized that major conflicts often begin with economic and financial pressures long before military action.
He observed that countries historically waged tariff wars, froze assets, and imposed embargoes and financial restrictions prior to war — a pattern he likened to today’s “capital wars,” where sanctions and financial measures are central tools of confrontation.
Dalio identified the US-China rivalry, particularly over Taiwan, as the most significant strategic tension, noting that both confrontation and retreat carry high costs, either in lives and money or in the loss of status and influence.
Investment Advice and Monetary Concerns
Dalio advised investors to reduce debt and increase exposure to gold, explaining that wars and crises are typically financed through borrowing and printing money, which devalues debt and currencies. He highlighted that gold remains a reliable store of value during times of conflict.
He expressed skepticism about cryptocurrencies and central bank digital currencies (CBDCs), warning that such systems lack privacy and could grant governments unprecedented oversight and control over financial transactions. Dalio argued that digital currencies may allow governments to monitor all transactions and even freeze access to funds if needed.
He also highlighted that the traditional monetary order is weakening. According to Dalio, fiat currencies and debt no longer serve as stable stores of wealth in the same way, reflecting declining trust in central banks and global financial systems.
