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Dalio bases his analysis on the concept of the “Great Cycle,” a model that describes the rise and fall of empires. In his opinion we are currently in the “Sixth Phase”, reminiscent of the 1930s. Then debt crises, protectionism, nationalism and political extremism led to global conflict.
Capital wars instead of military escalation. This is the financier's recipe for investors
Dalio emphasizes that great conflicts often begin with economic tensions: trade wars, asset freezes, sanctions and embargoes. Today we are observing “capital wars” in which financial restrictions become the first line of battle. It remains the most dangerous flashpoint US-China rivalry over Taiwan — a conflict that could have both military and financial dimensions.
In the face of increasing instability, Dalio recommends debt reduction and increasing the share of gold in the portfolio. In his opinion, wars and crises are financed by printing money and increasing public debt, which leads to the weakening of currencies and bonds.
According to him, gold – as a permanent and limited resource – is intended to protect the value of wealth in times of inflation and systemic crises. “In times of conflict, gold is a safe haven,” the investor emphasizes.
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Historical Parallels and a Warning by Ray Dalio. Skepticism also towards cryptocurrencies
Dalio remains wary of Bitcoin and central bank digital currencies (CBDCs). He believes that they may increase states' control over the flow of money and limit users' privacy. In his opinion, digital monetary experiments do not provide the same durability as physical assets.
The creator of Bridgewater reminds us that The 1930s began with the Great Depression and the “self first” policy, which ultimately led to World War II. Today, he sees similar signals: trade tensions, financial sanctions and growing polarization between superpowers.
Dalio, who previously warned of the 2008 financial crisis, urges caution. In his opinion, in times of geopolitical clashes and high debt the greatest threat to wealth is inflation and loss of trust in institutions. Therefore, instead of relying solely on fiat currencies or digital assets, he recommends real capital security.
