Billionaire investor Ray Dalio says the post-1945 world order is breaking down and the era ahead will be driven less by rules and more by raw power.
In a lengthy post on X, Dalio points to remarks at the Munich Security Conference where leaders described a shift into “great power politics,” with Germany’s chancellor saying the old order “no longer exists” and warning that freedom “is no longer a given.”
Dalio says the breakdown fits what he calls “Stage 6” of the Big Cycle, a phase he describes as “great disorder” where “might is right” and major powers clash.
He says international governance is weaker than domestic governance because there is no true global equivalent of laws, police, courts and enforceable penalties, meaning power dynamics dominate when disputes escalate.
“The international order follows the law of the jungle much more than it follows international law.”
Dalio says great power conflict tends to show up across multiple fronts before it ever turns into a shooting war, listing trade and tariff fights, technology restrictions, capital warfare through sanctions, geopolitical disputes and eventually military conflict.
“The two things about war that one can be most confident in are 1) that it won’t go as planned and 2) that it will be far worse than imagined.”
Dalio says the most dangerous moments are when rivals have comparable strength and existential differences, noting that these conditions are when miscalculation risk spikes and tit-for-tat escalations can spiral.
“As of this writing, the most potentially explosive conflict is that between the United States and China over Taiwan.”
Amid the potential for chaos and military conflict, Dalio urges investors to accumulate one time-tested safe-haven asset.
“As for investing, sell out of all debt and buy gold because wars are financed by borrowing and printing money, which devalues debt and money, and because there is a justifiable reluctance to accept credit.”
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