Ray Dalio: I fear we're entering the most dangerous phase of the 'Big Cycle'

16 hours ago

The author, a global macro investor, describes a repeating pattern called 'the Big Cycle' that lasts about 75 years, involving the rise, evolution, and collapse of monetary, political, and geopolitical orders.
We are currently in Stage 5 of the Big Cycle, which precedes Stage 6—a period of great disorder. The author compares the current era to the tumultuous pre-1945 period rather than the post-WWII stability.
Key markers of Stage 5 include large government debts, geopolitical conflicts, income/wealth gaps, populism, and a shift from a dominant power world order to great powers conflict.
Historical parallels include the 1929-1945 breakdown, where democracies turned to autocracies amid financial stress and ideological divides, similar to current trends like MAGA and WOKE in the U.S.
The author notes the breakdown of the post-1945 multilateral order, rising great power conflicts (e.g., China, Russia), and movements away from fiat currencies toward gold.
While nothing is predestined, the author is pessimistic due to human nature and the challenges of resolving deep disagreements and financial stresses within democracies.

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