On January 27, Bridgewater Associates founder Ray Dalio published a lengthy in-depth analysis on social media, warning that the United States is in the fifth stage of his "Great Cycle" theory (the eve of order collapse), with multiple indicators suggesting that society may slide into the sixth stage (civil war and order collapse). His core judgments include:
• Worsening finances and conflict: High government deficits and rising debt, coupled with historically high wealth and values disparities, constitute a "classic deadly combination".
• Populism and extremism: Political polarization intensifies, moderates are silenced, the media becomes a tool for partisan struggle, and the "loss of truth" in the public sphere.
• Escalation of violence: The recent deaths of protesters in Minneapolis and the clashes between the central and state governments are typical signs of the transition to Phase Six.
• Systemic failure: The legal and political systems are increasingly being used as weapons of struggle, with rules giving way to the logic of "winning at all costs".
Ray Dalio argues that the current situation bears a striking resemblance to the early stages of the order restructuring of 1930-1945. Without leadership to build consensus and implement painful but necessary reforms, society risks repeating the mistakes of civil war/revolution. Investors and policymakers should acknowledge cyclical forces, promote productivity-driven reforms (education, infrastructure, research), and replace zero-sum struggles with win-win collaborations to prevent the system from sliding into irreversible collapse. While the trajectory is difficult to reverse, wisely choosing ways to mitigate conflict and rebuild broad prosperity before slipping into stage six remains a possible and necessary path.
