Picture this: It\u2019s 1933. The League of Nations is struggling for legitimacy as Germany and Japan withdraw, driven by swelling imperial ambitions. The international order is fracturing, giving way to what Bridgewater Associates founder Ray Dalio calls \u201cthe law of the jungle,\u201d where raw power, not diplomacy, determines global outcomes. Dalio predicts we\u2019re headed in that direction.<\/p>\n
The billionaire investor made an X (formerly Twitter) post<\/a> Saturday titled \u201cIt\u2019s Official: The World Order Has Broken Down,\u201d pronouncing the modern global order dead. The billionaire investor cited a recent report from the Munich Security Conference, a global forum for discussing international security challenges. The report, titled \u201cUnder Destruction<\/a>,\u201d claims the world has entered an era of \u201cwrecking-ball politics\u201d where \u201csweeping destruction\u2014rather than careful reforms and policy corrections\u2014is the order of the day.\u201d<\/p>\n \u201cThere is great disorder arising from being in a period in which there are no rules, might is right, and there is a clash of great powers,\u201d Dalio wrote in his X post, referencing his 2021 book Principles for Dealing With the Changing World Order. In his book, he evaluates 500 years of human history to explain why some empires succeed and others fail, describing a six-stage, 80-year cycle that tracks the evolution of monetary policy and international order.<\/p>\n Dalio, the founder of the largest hedge fund in history, has for years used his Big Cycle framework to caution that the U.S. is deep into what he calls Stage 5\u2014the \u201cpre-breakdown phase\u201d characterized by bad financial conditions and internal conflict. His latest post is the first time the billionaire investor has claimed the U.S. has finally entered Stage 6, the violent finale of order collapse, characterized by revolution and WWII-like conditions.<\/p>\n In chapter six of his book, which Dalio shared in his most recent X post, he outlines that the fading global order could give way to \u201close-lose relationships\u201d when rival powers fall into the prisoner\u2019s dilemma resulting in wars where the cost in lives and money far outweigh any potential benefits. He maintains international institutions are too weak to contend with the interests of wealthy nations like the U.S. and China, leading him, along with world leaders, to conclude the rules-based order is officially dead.<\/p>\n According to his book, Dalio says the transition to Stage 6 could entail a series of trade wars, technology wars, geopolitical wars, and capital wars, all of which have the possibility of culminating in a military conflict once those conflicts materialize as an existential threat for countries. The investor says the conflict between the U.S. and China over Taiwan is currently the one most well-positioned to explode into a violent offense.<\/p>\n While optimists like Google<\/a> DeepMind<\/a> CEO Sir Demis Hassabis, imagine humanity on the verge of a new renaissance<\/a> thanks to AI advancements and \u201cradical abundance,\u201d Dalio predicts we could be returning to that solemn pre-WWII scenario. Hassabis, to be sure, believes it will come about in roughly a decade\u2019s time, begging the question of whether darkness of the kind that Dalio foresees will precede the light.<\/p>\n Dalio cites converging opinions from global leaders of opposing political views to hammer this point through, claiming there is \u201cnow nearly universal agreement that the post-1945 world order has broken down.\u201d He cites French President Emmanuel Macron\u2019s comments that Europe must prepare for war and Rubio\u2019s assertion that the \u201cold world\u201d is gone.<\/p>\n The billionaire investor has edged toward this conclusion for years. Yet, he\u2019s grown even more bullish on the transition to Stage 6 since the beginning of the year. At Davos last month, the billionaire investor said<\/a> President Donald Trump\u2019s Greenland threats were an obvious indicator that the rule-based system was \u201cgone.\u201d And he recently posted<\/a> another lengthy essay on X, arguing the president\u2019s violent immigration crackdown in Minneapolis, paired with skyrocketing national debt, signaled a transition to Stage 6.<\/p>\n For the billionaire manager, the breakdown of the international rules-based order goes hand in hand with the erosion of international monetary policy. During a conversation<\/a> with Fortune at Davos, Dalio warned that the U.S.\u2019s surging $38 trillion national debt is a hallmark of late-stage cycle imbalances, much like previous events in history before a downturn.<\/p>\n In the conversation, he laid out a troubling binary choice for policymakers: \u201cDo you print money or do you let a debt crisis happen?\u201d<\/p>\n