What You Need to Know About Ray Dalio's 7,000 Word Warning
Ray Dalio is an American billionaire investor and the founder of Bridgewater Associates, one of the largest and most successful hedge funds in the world. He is widely regarded as one of the most influential figures in global finance.
He recently wrote an article titled: “It’s Official: The World Order Has Broken Down”
We are summarizing this roughly 7,000 word article so you don’t have to read the entire thing yourself.
Here’s what you need to know.
Dalio argues that the post 1945 world order has officially broken down, citing declarations from leaders at the 2026 Munich Security Conference. He frames this as Stage 6 of his “Big Cycle,” a period where rules collapse, might makes right, and great powers clash.
His most striking claim: Economic wars precede military ones by roughly a decade.
Before all-out wars are declared, there is typically about a decade of economic, technological, geopolitical, and capital wars where conflicting powers test the limits of each other’s power.
If you map it to today, the US and China have been in escalating trade, technology, and capital wars since roughly 2018. He warns that timeline should concern anyone paying attention.
He identifies five types of wars that tend to escalate in sequence with each one raising the stakes for the next.
What’s relevant for markets
The practical implication is that we’re likely in a sustained period of elevated geopolitical risk premiums, which means structurally higher volatility. The shift from a rules based order to a power based order creates more uncertainty, more tail risk, and more frequent regime changes in markets. Tariff escalations, sanctions, capital controls, and supply chain disruptions all feed directly into the kind of volatility dislocations we trade around.