Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates, has issued a stark warning that the United States is in the "fifth stage" of his empire life cycle—teetering on the brink of internal disorder and conflict. He emphasized that, amid current debt and political turbulence, gold remains the only asset that is "not someone else's liability." Dalio also offered survival strategies for ordinary people, including saving money, allocating to gold, and choosing stable places to live.

In a detailed interview with Tucker Carlson in Dubai on February 10, Dalio drew on decades of macroeconomic investing experience and historical cycle analysis to elaborate on America's current historical position, the logic of debt crisis progression, and corresponding strategies for investors.

Dalio pointed out that the world is being shaped by five major forces: monetary/credit cycles, domestic political order, geopolitical order, natural forces, and technological change. He believes the U.S. is currently in the fifth phase of his "six-stage great cycle"—a period characterized by extreme polarization and debt imbalance, where the system is on the edge but has not yet fully collapsed.

**Stage Five: One Step Away from Order Collapse** The market is highly focused on whether America's current macroeconomic environment is sustainable. Dalio offered a pessimistic outlook, dividing the cycle of national rise and decline into six stages, with the U.S. presently in the fifth. He stated, "We are in what I call stage five, which means we are on the edge but have not gone over the edge… Stage six is when these orders break down. We are not there yet, but we are close and moving in that direction."

This stage is typified by vast wealth gaps and value differences leading to intense political polarization, rising populism, and a disappearance of willingness to compromise. Citing polling data, Dalio highlighted the severity of the risk: "About 25% of the population say they would fight violently for their side. That is a pretty big percentage." He warned that when people are no longer willing to abide by system rules but instead choose to "win at all costs," democracies risk transforming into autocracies.

**Debt Trap and Currency Devaluation: History Rhymes** When asked what the "currency collapse" of stage six looks like, Dalio pointed to the core矛盾 between supply and demand for reserve currency debt: "From a monetary perspective, that is… insufficient demand for the reserve currency relative to supply. You produce a lot of supply, but demand is lacking. All else equal, long-term interest rates will rise…"

He further described a more familiar chain: insufficient demand pushes up long-term rates → central banks try to suppress rates and shorten debt issuance duration → central banks buy debt and expand balance sheets → currency depreciates relative to non-sovereign money like gold.

When Carlson questioned whether it is absurd for a central bank to print money to buy its own government's debt, Dalio replied, "The government is in a bind because it has a deficit, and unless you raise taxes and cut spending or take other measures, the deficit will be there. But that is bad for the economy and politically unworkable… Or you print money to cover the shortfall."

He also recalled the 1971 decoupling of the U.S. dollar from gold, noting that the "machine" has operated similarly repeatedly over recent decades, bringing stagflation-like side effects: "Since 1971 when we went off the gold standard and into a fiat money system, we have been doing this… I found they did exactly the same thing in March 1933… Then the country experienced the stagflation of the 1970s."

**Asset Allocation Strategy: Gold Should Be 5%-15% of Portfolio** On asset allocation, a key concern for investors, Dalio again emphasized gold's role as "money" rather than merely a speculative commodity. He noted that in cycles of excessive debt and currency devaluation, wealth and money are distinct concepts, and liquidity becomes critical during crises.

Dalio offered clear allocation advice: "If I had no view on gold, how much gold should I have in my portfolio?… For an individual, depending on their portfolio composition, it might be 5% to 15% of the portfolio."

He explained the underlying logic for favoring gold in compelling terms: "There is no currency in the world that you want as a reserve currency other than gold. It is just a default choice because it is debt, and gold is not… As they say, it is the only asset you can hold that is not someone else's liability, meaning you do not have to rely on someone else to make good on it (a payment promise)."

He argued that investors often view the world through the "lens" of the U.S. dollar, seeing gold prices rise; but if viewed through the "lens" of gold, one sees fiat currencies depreciating.

**How Ordinary People Can Navigate Turmoil: Diversification and Choosing Stable Residences** Facing potential turmoil—whether civil war or severe social conflict—Dalio offered several practical suggestions for ordinary people and investors:

- Financial discipline: Earn more than you spend; try to save. - Investment diversification: Include consideration of monetary attributes (allocating to gold). - Choosing where to live: Dalio observed that capital and populations are migrating from high-tax, high-conflict areas to stable, dynamic regions. "Domestically, it is Texas, Florida… Internationally, people move to places of stability and opportunity."

In closing, Dalio summarized that while the U.S. is in stage five, this outcome is not inevitable. However, repairing debt issues and healing social divisions require strong leadership and considerable political wisdom, which poses a "huge challenge" in the current environment.