Ray Dalio: I’ve studied 500 years of history and fear we’re entering the most dangerous phase of the ‘Big Cycle’

Most people are shocked by what’s unfolding in the world right now. I’m not. I’ve seen this movie before.

As a global macro investor for over 50 years, I’ve had to study the cause-and-effect relationships that drive history in order to place my bets. What I found is that all monetary orders, political orders, and geopolitical orders rise, evolve, and collapse in a repeating pattern I call “the Big Cycle”—typically lasting about 75 years, give or take about 30.

I believe that the times ahead will be radically different from what most people have gotten used to—that they will be more like the tumultuous pre-1945 era than what we have experienced since the end of World War II.

We Are Now in Stage 5

In my book Principles for Dealing With the Changing World Order, I described six stages of the Big Cycle. Stage 6 is the breakdown—the period of great disorder. Stage 5 is what immediately precedes it. That is where we are now.

I find that how I see things now is much different from how most other people see things because of our different perspectives. My perspective has been shaped by being a global macro investor who has to bet on what the future will be like. In pursuit of doing that well, I have found it invaluable to study the cause/effect relationships that repeatedly drove global macro events over the last 500 years.

With that perspective, watching what is happening now is like watching a movie that I have seen many times before because events are transpiring in the same ways as I have seen them transpire many times before. This perspective has been invaluable for me in placing my bets, so, at this stage in my life, I want to pass it along in the hope that it can help others prepare for what’s ahead. 

In contrast to my perspective, it seems to me that most people are surprised by what’s happening because nothing like it has happened in their lifetimes and because they are paying more attention to the events of the day than to how monetary orders, domestic political orders, and international geopolitical orders evolve over........

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