Billionaire investor Ray Dalio warns that the US is approaching a catastrophic breakpoint, with spiral debt, social division and fiscal dysfunction as historic collapse before the Mirror War.
Ray Dario predicts breakdowns as we face the cracks in debt and unity
Ray Dalio, manager of the billionaire hedge fund, shared a long post on social media platform X on June 9, saying the US is progressing through a dangerous phase defined as the 5th stage of a historic “big cycle.”
Having studied the 500-year historic transition since more than 50 years as a global macro investor, Dario described the intensification of conflict, wealth inequality and financial instability as a potential domestic collapse. He referenced the principles outlined in his 2021 book, “Principles for Addressing Change in the World Order,” noting that recent developments fit the trajectory that leads to internal obstacles and civil wars. The founder of Bridgewater Associates wrote:
A study of over 50 civil wars and revolutions revealed that the most reliable and key indicator of civil wars or revolutions is the finances of bankrupt governments combined with a large wealth gap.
Dario described stage 5 as a point where social conditions become very unstable due to the “classic toxic mix” of high public debt, massive deficits, and expansion of wealth and values. He warned that these imbalances amplified by economic shocks often encourage governments to fund spending by printing money, leading to currency depreciation and loss of investor confidence. Dario said: “When the government runs out of purchasing power, there's a collapse. But there's a lot of fight for money and political power on the way to collapse.”
He also emphasized that unlike the federal government, state governments cannot print money. This is an asymmetry that exacerbates financial pressure in debt countries such as Connecticut, Illinois and New Jersey. According to Dalio, such structural financial stress combined with social fragmentation “will lead to a fight over how rare resources are allocated.
In his overview of Stage 6 (the stages of the Civil War), Dario paid stern caution. He noted that open conflicts often persist when countries lose their ability to mediate conflicts within a shared political framework. He gave his opinion:
Civil wars are extremely cruel as they are a battle against death. Everyone is extremist because everyone is forced to choose the side and fight.
He acknowledged that history sometimes allows for peaceful restructuring, but he emphasized that the outcome depends heavily on leadership being able to unite rather than splitting. Without such leadership, he warned that escalation from financial dysfunction to violent conflict is increasingly likely.
