Ray Dalio: The United States is at the brink of the fifth stage of the "Long-Term Debt Cycle," facing risks of a civil war and an order breakdown.

**January 27: Ray Dalio, founder of Bridgewater Associates, shared a lengthy, in-depth analysis on social media, warning the U.S. is currently in the fifth stage of his "long-term debt cycle" theory—on the cusp of an order breakdown—with multiple indicators pointing to a potential slide into the sixth stage (civil war and order collapse).** His key judgment factors include: - **Fiscal Deterioration & Conflict**: High government deficits, ballooning debt, and record-high wealth and values gaps form a "classic deadly combination." - **Populism & Polarization**: Growing political polarization, muted moderate voices, media as a partisan tool, and an erosion of truth in the public sphere. - **Escalating Violence**: The recent death of a Minneapolis protester and tensions between federal and state governments are clear signs of a shift toward the sixth stage. - **Systemic Dysfunction**: Legal and political systems increasingly weaponized in conflicts, with rules giving way to "win-at-all-costs" logic. Dalio noted the current situation mirrors the prelude to the 1930-1945 order restructuring. Without consensus-building leadership and painful but necessary reforms, society risks repeating civil war or revolution mistakes. Investors and policymakers should recognize the force of cycles, advance productivity-focused reforms (covering education, infrastructure, and research), and shift from "zero-sum battles" to "win-win collaboration" to avoid irreversible collapse. While the trajectory is hard to change, there is still a chance—and a need—to ease tensions through smart choices and rebuild broad-based prosperity before entering the sixth stage.