Ray Dalio’s Study on Empires
Dalio’s 500-year study suggests that empires go through stages of health, crisis, and collapse. According to Dalio, the US is currently in Stage Six, the “dangerous stage” of the “Big Debt Cycle“, which indicates a need to shift away from debt assets.
The “Big Debt Cycle” and its Stages:
- Stages 1-4 (Rise) Countries borrow to build infrastructure.
- Stage 5 (Top) Debt service reaches 15-20% of GDP, crowding out productive spending. The US crossed this threshold around 2008.
- Stage 6 (Crisis) Federal debt exceeds 120% of GDP, leading to a choice between rising interest rates (crashing the economy) or printing money (creating inflation). Both destroy wealth.
- Stages 7-9 (Reset) This involves massive restructuring through negotiation or war. Dalio’s data suggests conflicts are inevitable when internal inequality peaks and external rivals emerge.
The Solution: Gold and Silver:
Physical gold and silver are a protective measure against the impending debt reset. Even financial institutions like Morgan Stanley and Bank of America recommend significant gold allocations in portfolios.
