Ray Dalio’s writing can feel like drinking from a firehose of history, finance, and geopolitics.
His tweets, stories, website, books – they feel.. arcane. Academic. Exhausting .
So I thought it might be helpful to articulate – in plain freaking English – what exactly he’s saying, and give concrete, easy-to-understand examples.
Below is a breakdown of the latest.
What Most People See Today:
- Headlines about tariffs, trade wars, and stock market swings.
- The latest moves from Trump, Musk, or Powell.
- Drama with yo mama.
What Dalio Says Is Happening:
We’re in the early stages of a major global breakdown. Three big systems are falling apart:
- The global economic system (money & debt)
- The domestic political system (within countries like the U.S.)
- The international power structure (between countries)
These kinds of breakdowns only happen once or twice in a lifetime. But they do happen. And they tend to follow a pattern… so let’s take a look and throw back to history when it makes sense.
The Global Economic System Is Cracking
What it means:
- Just like households and families, the global economy runs on a system of borrowing and lending (sometimes called ‘financing’).
- Countries like the U.S. borrow huge amounts of money to fund spending (military, Medicare, tax cuts, stimulus checks, etc.). For reference, the U.S. borrowed $2.3 trillion in 2024 alone. Holy shit that’s a lot.
- Countries like China sell goods to the U.S., earn dollars, then lend those dollars back to the U.S. by buying U.S. debt.
- This “you buy our stuff, we lend you the money to do it” setup has worked for decades.
The problem:
- It mostly works if both sides trust each other.
- The U.S. is now trying to make its own stuff again, reduce dependence on China, and spend even more.
- China is looking for ways to not depend on the U.S. dollar and protect itself.
- That trust – especially given the increasingly insane Tariff war – is basically gone.
And we’ve seen what happens when that trust disappears.
Back in the 1930s, countries around the world had built their economies on mountains of debt and shaky deals. Nations were lending to each other, trading unevenly, and hoping things would somehow balance out.
But they didn’t. Trust broke down. Countries started slapping tariffs on each other, stopped lending, and pulled back into their own corners.
It wasn’t just a stock market crash. It was a full-blown freezing of the global economy.
To dig out of the mess, world leaders had to come together and build something new. That’s how we got the Bretton Woods system — basically a fresh set of rules for how money moved between countries.
It created decades of relative stability.
Dalio thinks we might be heading into another version of that. The U.S. dollar has been the world’s go-to currency for a long time, but other countries are starting to look for alternatives.
If the current system keeps showing signs of weakness or if countries keep dropping elbows on eachother off the top rope, we could see prices rise, borrowing get more expensive, and governments tighten the flow of money in and out of their economies.
Domestic Political Systems Are Breaking Down
What it means:
- Inside countries like the U.S., inequality has exploded.
- The rich are getting richer. The poor and middle class feel like the game is rigged.
- Education, healthcare, job opportunities — all uneven.
- People are pissed. And they don’t trust politicians to fix it because they’re all donkeys.
The problem:
- Populism rises, nobody is in the center anymore.
- Everything is an effing fight: left vs. right, rural vs. urban, old vs. young.
- Democracy struggles because it relies a lot on compromise — and nobody’s compromising anymore.
You can look at the French Revolution to see what happens when the gap between the rich and the poor gets too cray – and nobody seems to be fixing it.
In the late 1700s, rich peeps were throwing lavish parties and drinking champs, while most people couldn’t even afford bread. The government was broke, useless, & so things boiled over.
Protests turned into riots, and then into a full-on revolution – the monarchy collapsed, and in the end, the people turned to a strongman — Napoleon — to bring back some order and pride.
Dalio basically is saying we’re in the early days of that breakdown right now, as evidenced by crazy inequality, trust gone, and a massive increase in political violence.
And when people are scared and frustrated, they often rally around someone who promises to take charge and “fix it.” (cough cough, Trump).
But history shows that when that kind of leader shows up, things don’t usually get calmer — they get more extreme.
The Global Power Structure Is Breaking Down
What it means:
- Since WWII, the U.S. has been the world’s top dog.
- It created and led a global system of trade, diplomacy, and military alliances.
- But that dominance is changing – maybe fading. And others are reacting.
The problem:
- Less cooperation. More confrontation (ex: The U.S. is clashing with China on trade, tech, and Taiwan.)
- Countries are ditching global institutions (like the U.N., WTO).
- We’re entering an era of every-nation-for-itself.
When was the last time a reigning heavyweight was challenged?
In the early 1900s, the British Empire was still running the show, but Germany was bulking up — bigger economy, stronger military, hungry for a seat at the big boy table.
The power balance got shaky, countries started picking sides, building weapons, and eyeing each other for a bar fight. One assassination later, the whole thing blew up into World War I.
The old world order snapped like a twig.
Dalio feels like we’re on the edge of something similar now.
The U.S. is still the biggest player, but China’s gaining fast. Russia’s throwing punches (and is now BFFs with Trump), other countries are hedging their bets.
The vibe isn’t “let’s work together,” it’s “you do you.”
If this keeps rolling, we’re looking at more cyberattacks, more backchannel skirmishes, and way less global cooperation.
The era of one clear superpower is slipping away.
Summing it up
These cycles have happened before — debt bubbles, donkey politicians, rising powers, big collapses — and they always feel chaotic right before a massive reset.
It’s hard to say right now – during Tarrifapalooza – if this world view is coming to an inevitable head… or if it’s an over-exaggeration.
I honestly don’t know how I feel about it.
But, Dalio makes some super valid points, so we’d all be well to consider what he’s saying.
