Dalio's latest in-depth interview: The United States is on the verge of collapse and civil war, and gold is the only safe haven.
Ray Dalio, founder of the world’s largest hedge fund Bridgewater, warns that the US is at the “fifth stage” of the long-term cycle of imperial rise and decline—a prelude to the collapse of order and outbreak of conflict.
He bluntly states that amid current debt and political turmoil, gold is the only asset that is “not someone else’s liability.” He also suggests ordinary people try saving, allocating to gold, and choosing where to live as survival strategies.
On February 10, Ray Dalio, founder of Bridgewater, had an in-depth interview with Tucker Carlson in Dubai, UAE. Drawing on decades of macro investing experience and historical cycle research, Dalio elaborated on America’s current historical position, the evolution logic of the debt crisis, and strategies for investors.
Dalio points out that the world is shaped by the combined influence of five forces: monetary/credit cycles, domestic political order, geopolitical order, natural forces, and technological change. He believes the US is currently at the fifth stage of his “six-stage grand cycle”—that is, a period on the edge but not yet fully collapsed, characterized by extreme polarization and debt imbalance.
At the “Fifth Stage”: Only One Step Away from Collapse of Order
Markets are intensely focused on whether the US macro environment is sustainable. For this, Dalio gave a pessimistic outlook. He divides the rise-and-fall cycle of nations into six stages and says the US is currently at the fifth stage.
Dalio stated openly in the interview:
“We are in what I call the fifth stage, meaning we're on the edge but haven't crossed it yet... The sixth stage is when these orders collapse. We're not quite there but very close and moving in that direction.”
The typical features of this stage are huge gaps between rich and poor and values leading to fierce domestic polarization, rise of populism, disappearance of compromise willingness. Dalio cited polling data showing the severity of risk:
“About 25% of the population says they'd fight violently for their camp. That’s quite a high percentage.”
He warns that when people no longer want to obey system rules but choose to “win at all costs,” democracy faces risk of turning into autocracy.
Debt Trap and Currency Devaluation: History Rhymes
Talking about what the “currency collapse” in the sixth stage looks like, Dalio pinpoints the core conflict as the supply-demand relationship of reserve currency debt:
“From a monetary perspective... demand for reserve currencies doesn't meet supply. You produce a lot of supply, but demand isn't enough. If other conditions stay the same, long-term rates will rise...”
He further described familiar market chains: insufficient demand pushes up long-term rates → central bank tries to suppress rates, shortens debt issuance → central bank buys bonds, expands balance sheet → currency devalues versus gold, etc.
When Carlson asked if “central banks printing more to buy their own debt” is absurd, Dalio replied:
“Government gets into trouble because there's a deficit; unless you raise taxes and cut spending or take other action, the deficit persists. But that's bad economically and doesn't work politically... Or you print money to cover the gap.”
He also recalled history, such as the 1971 dollar-gold decoupling, noting that “the machine” has repeatedly operated similarly for decades, bringing stagflation side effects:
“Since we left the gold standard in 1971 and entered a fiat system, we've been doing this... I found the government did exactly the same thing in March 1933... then experienced 1970s stagflation.”
Asset Allocation Strategy: Hold 5%-15% Gold in Portfolios
On asset allocation, Dalio emphasizes gold's quality as 'currency' rather than solely a speculative commodity. He notes that amid excess debt and currency devaluation cycles, wealth and money are two concepts, and liquidity is vital in crisis.
Dalio offered clear allocation advice in the interview:
“If I have no view on gold, how much should I hold in my portfolio?... For individuals, depending on portfolio composition, maybe 5%-15% of the portfolio.”
He explained the pro-gold rationale with striking words:
“Except for gold, the world doesn't have the currency you want as reserve currency. It's just a default because it's debt and gold isn't... As they say, it’s the only asset you own that isn’t someone else’s liability, meaning you don’t have to rely on others for it (payment promise).”
He believes investors typically see the world through a dollar “lens” and see gold prices rise; but through gold’s “lens” you see fiat currency devaluing.
How Ordinary People Respond: Diversification and Choosing Stable Residences
Facing possible upheaval (whether civil war or extreme social conflict happens or not), Dalio gave pragmatic advice to ordinary people and investors:
- Financial discipline: Earn more than you spend, try saving.
- Diversified investment: Including thinking about monetary quality (allocating gold).
- Choosing where to live: Dalio observes capital and population migrating from high-tax, high-conflict areas to stable, vibrant places. “In the US it’s Texas, Florida… globally, people move to stable and opportunity-rich areas.”
Dalio summed up that although the US is at stage five, it's not an unavoidable fate, but requires strong leadership and exceptional political wisdom to repair debt issues and heal social rifts—which is “a huge challenge” in the current environment.
Summary:
Bridgewater founder Ray Dalio gives a warning in his latest interview, pointing out that the US has entered the “fifth stage” of the grand cycle of imperial rise and fall, marked by extreme political polarization and debt imbalance, only one step away from the “sixth stage” of order collapse. He stresses the US is facing severe supply-demand issues for its debt, and central bank printing to deal with deficits will lead to currency devaluation. For investors, Dalio clearly advises holding 5%-15% gold in portfolios, calling gold “the only asset that isn’t someone else’s liability.” He urges investors to focus on the difference between “wealth” and “money,” and hedge potential social and geopolitical risks through asset diversification and choosing stable residences.
Dalio Interview Full Translation:
Tucker Carlson
Thank you so much, Dalio. We spoke here last year; you outlined those cycles you see among civilizations vying for dominance. I don't think everyone accepts your viewpoint. You've been ridiculed for, you know, sounding like Jeremiah scaring people, etc.
Tucker Carlson
A year later, you published your long-awaited new summary this week. About 18 people sent it to me. So, I think people are ready to listen. If you don't mind, can you elaborate on the cycle you see and where the US is at?
Ray Dalio
Gladly. There's indeed a cycle. There are all sorts of orders and systems, right? First is the monetary order. How does the economy work? You inject money, create credit. Those with credit act upon it. If they earn enough to pay back, they borrow. The system works well; they produce, create opportunities, form capital markets, etc.
Ray Dalio
That's the monetary system, and its cycles: When there's no debt—like in 1945—we started a new monetary order: no debt, an emerging system, growing over time. There's a mechanism: when debt service rises compared to income, it squeezes other spending; applies to individuals and companies, though governments can print money, but still squeezes out spending, becoming a problem. There's also supply and demand. With a new monetary order—like the US post-war, with the dollar as world reserve—you can sell more debt. So there is supply and demand. As debt keeps accumulating—one person's debt is another’s asset—people accumulate lots of dollar debt/assets, then sell more debt and create supply-demand mechanisms. Domestic politics and geopolitics then intervene, creating bigger risks for the monetary system. We'll discuss this later.
Ray Dalio
The first force is this monetary system mechanism. Second is domestic political order. Every country has an order/system; all orders change, evolve, connected to the economy. When there's huge wealth/value gaps, people feel the system doesn't work for them; polarization increases, populism arises as in the 1930s—left versus right—advancing to irreconcilable divisions, lack of compromise and acceptance of loss, instead fighting at all costs, as in 1930s. Democracies opt for autocracy, polarization so severe there's no will to follow democratic norms. This dynamic repeats in history.
Ray Dalio
Third is geopolitical order: how countries interact, what system exists. After WWII, we created a multilateral system—somewhat naive in parts, but different from earlier systems. Through multilateralism, there are the UN, WTO, WHO, world court, etc.—the idea is representativeness and decision-making based on some rules. But every system must have enforcement. If the multilateral system’s interests don't align with the strongest actor, power prevails.
Ray Dalio
So you see order collapse dynamics, right? We’re breaking monetary order classically, breaking political order classically, breaking geopolitical order. We must recognize that all these orders change through history. They always change and collapse in some ways, returning to earlier states. Fourth is natural forces: droughts, floods, and... pandemics kill more than wars; their huge impact can't be ignored. Fifth is invention of new technologies. Especially miraculous new tech, vital for prosperity and war. Whoever wins the tech war wins economic and geopolitical wars. There’s this dynamic. It’s expressed when emerging powers challenge incumbents, no court to appeal to, no resolution. There are tests for these forces. We’re now in a power-driven dynamic. If you understand how this dynamic works overtime, and get into its specific symptoms—like in my book “Principles for Dealing with the Changing World Order” about five years ago, I divide the cycle into five (really six) stages. You can see the symptoms at each stage and the options. When at different stages, leadership also faces respective stages. In my book and in our talk today, I just try to help people see this. I’m just a pragmatic investor, right? Investing for 60 years, macro investor, always betting on what the future will look like. I place financial bets, and now want to pass this along. So... can we calmly discuss or examine how this machine operates to produce such dynamics? That's all.
Tucker Carlson
Absolutely. You’re not judging; just acknowledging facts. What has happened, so might happen. I don’t want the political factor—the second factor you mentioned—to get lost. You pointed back to the troubled 1930s, saying four democracies reverted to autocracy due to partisan deadlocks. Is that a universal rule?
Ray Dalio
You can look at Rome. Who's in control? Yes, you know, Caesar in the Senate—standing there. Plato wrote about this, about 350 BC, in “Republic,” describing such cycles—democratic challenges, voting, etc. Then there’s wealth gaps, the rich unwilling to vote, power shift, etc.
Tucker Carlson
So partisan strife turns into gridlock, irreconcilable, chaos. Then, inevitably, it becomes autocracy.
Ray Dalio
Right? When... when I no longer accept system rules, everyone thinks it's rigged. OK. Is the Supreme Court rigged because one party appointed more judges—becoming unfair? I recall when the Supreme Court was just the Supreme Court, we lived in an era where the system was fair: legal system too. When you go to court and are convicted, you trust the system. When that's gone, and people's cause matters more than the system itself, the system is at risk.
Tucker Carlson
Right? Yes, obviously. So tribalism, political or racial; when people split into tribes, have no common ground or hope for compromise—they’ll welcome a new system.
Ray Dalio
See, it’s interesting: it’s like watching the same movie repeatedly, as people stereotype each other—racial, economic, whatever. “Oh, they're those people, I'm this type.” Now it's a battle of stereotypes.
Tucker Carlson
Those stereotypes are dehumanizing, so fighting is easier.
Ray Dalio
No empathy. Of course, and...
Tucker Carlson
You don’t view the other as human. That's serious...
Ray Dalio
Conflict, right? You must pick sides, huh? Three choices: pick sides and fight, keep quiet and hope to stay out, or escape. Historically, that's the case. We're fairly confident.
Tucker Carlson
So you actually join civil war, try to find a safe place in-country, or just split?
Ray Dalio
In other words, you keep silent, not wanting to be involved. Many are scared now—you know, people write to us, never thought they'd be afraid, not wanting to speak up. So keep low profile. Either join the fight, pick sides and fight, or keep quiet, or escape. People leave through migration... Think about migration—bad things happen, then people move elsewhere. We're in UAE now; many came here, essentially escaping. So you see many symptoms. When things turn violent... too many killed—you cross the line, like in Iran—did we cross the line? Yes, then those symptoms surface, financial issues too, how to pay, etc.
Tucker Carlson
Really. But back to politics, final question: Is there resolution? When people don’t want compromise, don't want to live together, can the system stay intact? Have you seen examples where people say “Wait, let’s share power, step back before violence or a king”?
Ray Dalio
Sometimes in dynasties, yes, but rarely. What happens is reversal or repair by someone strong enough to handle the issues—say, we have a debt problem, other problems; this person could unite people—almost as Plato's “benevolent autocrat.” That’s in his cycle. You need someone able to stop fighting, wise enough, applying needed discipline: financial discipline, dealing with debt, supply-demand, taxing? Cutting spending? What to do for budget balance? Or not quite balance—maybe 3% deficit to sustain conditions. That’s financial discipline. What cooperation could keep us from hurting each other? Because we’re at a juncture—say, approaching the next midterms—GOP likely loses House, maybe even Senate. Imagine after, and possible conflict, how will that work? Rule of law, or win at all costs? If “win at all costs,” then, are there rules? Will they be followed? That dynamic. It recurs. Achieving that status isn't easy, as you must stop fighting and do what's needed to be strong—it's a huge challenge.
Tucker Carlson
Given your five factors, the US, the West (including Europe), is at what stage in the rise-and-fall cycle?
Ray Dalio
In my book, I show 18 health indicators: education, military, reserve currency, etc.—strength levels. The US is strongest but is relatively declining, facing conflict.
Ray Dalio
If you look at “Principles for Dealing with the Changing World Order,” you see charts quantifying this. I don’t want to just declare; if you look at education, test scores, stats, you see rising powers, declining powers, large wealth/value gaps. We're in what I call stage five—on the edge but not crossed. We haven't yet... Also capabilities—before chaotic periods, maybe currency system collapse. What's currency? We should discuss. Can currency store wealth effectively? If not, what happens? So we're at stage five of the six-stage cycle. Stage six is collapse. Not quite there but close, moving that way.
Tucker Carlson
What does collapse look like? Stage six?
Ray Dalio
From a monetary view... demand for reserve currency doesn’t meet supply. That's a supply-demand issue. Large supply but insufficient demand. If other conditions constant, long rates rise, central bank tries to suppress long rates by lowering short-term rates and shortening debt maturity issuance, right? That dynamic. Then, relative to non-sovereign currencies—like gold—those debts and money devalue. Central banks and countries hold gold as alternative reserves, partly due to supply-demand, partly for payment concerns. Payment issues—like Japan pre-WWII, faced economic problems. The US imposed sanctions, essentially didn’t pay Japanese debt—a creditor/debtor issue—similar as with Russia. US basically controls, as it can control treasuries, etc. Willingness to hold such currency declines, more to non-sovereign currencies—I think gold. That’s it, right?
Tucker Carlson
Other countries think holding dollars is risky, for multiple reasons, one being: if the US government doesn’t like you, it can seize your dollars. So it’s not worth it. Right.
Ray Dalio
It’s a debtor/creditor risk. Holding treasuries could be insecure for two reasons: sanctions, or supply-demand issues. So moves in that direction are emerging. Governments want to control their supply-demand, perhaps via capital controls, or similar measures. But they may feel vulnerable. If the US can't sell enough bonds, if demand is lacking, US will also feel vulnerable, since rates must rise to balance supply-demand; too much supply relative to demand.
Tucker Carlson
To make bonds more appealing to buyers.
Ray Dalio
Yes, and—must also cut credit demand. If rates rise, people borrow less, etc. That mechanically slows economy, producing such results. The central bank then intervenes, prints money, buys debt, leading to currency devaluation. That's the debt mechanics, linked to politics and geopolitics. That answer—I can...
Tucker Carlson
If foreign countries won’t buy your debt, central bank decides to print more and buy your own debt—which is what we're doing—shouldn’t people stop and think: “Wait, this sounds like a windmill, what are we doing? Seems crazy.”
Ray Dalio
They're in trouble because they have deficits; unless they raise taxes or cut spending or take other measures, the deficit persists. But that hurts the economy and isn’t politically viable.
Ray Dalio
Yes, OK. Or print to cover. Since the 1971 collapse—when too many claims against gold, and we had a gold-linked system—in August 1971, I remember clearly, I’d just graduated college, before grad school, working at NYSE. Nixon went on TV Sunday night, said we’ll stop redeeming paper money for gold; you won't get gold. Next morning, I walked into the exchange expecting a crisis. What they did was print, and then the stagflation of the 1970s ensued. I was amazed, never saw this before, so I started studying history. Found they did exactly the same thing in March 1933. Roosevelt did the same.
Tucker Carlson
Just after he took office?
Ray Dalio
Yes, for the same reasons, because your options are lots of defaults and debt troubles, or print money. Right? That's how the machine works. So, since 1971 we’ve been doing this—Fed, you know, etc.
Tucker Carlson
So it works, kind of.
Ray Dalio
55 years, but it shows signs... its effect is like...
Tucker Carlson
Like a hangover cure? Yes, I'm familiar. Right, it...
Ray Dalio
You provide more money/credit; to get out, you make paying debt easier; you create... yes, like in 2008 or 2020, you give money, provide credit, funding, facilitate all that, but then debt rises again, until you reach a debt squeeze tipping point with supply-demand issues. That’s why there are these big debt cycles.
Tucker Carlson
Even those uninterested in monetary policy/macroeconomics feel at some point, this practice won’t work anymore. It’ll just collapse.
Ray Dalio
It happens repeatedly, so...
Tucker Carlson
What’s it look like? People talk about debt crises.
Ray Dalio
That’s why I published a book recently—less than a year ago—called “How Countries Go Bankrupt” (so he actually means “Principles: Dealing with Changing World Order,” possibly confusing titles). Yes, the big cycle. What I wanted was just to show 35 cases. That simply shows the mechanics.
Ray Dalio
OK, so the spending squeeze and supply-demand dynamics, then you see, as I say, long rates rise, short rates drop, central banks suppress short rates, shorten debt duration, central banks buy that debt. Now central banks own lots of treasuries, start losing money, as they hold, then rates rise. So they must print money and credit to keep rates down, losing more; that dynamic can't stop capital flow changes.
Ray Dalio
That’s why... in all traditional cases, you see a shift to hard money—gold, right? As seen, the shift to gold dynamic emerges, then it acts on its own. Think about 1971–1970s, leading to stagflation. At some point, inflation or currency devaluation becomes so severe central banks must tighten, right? Like Volcker, 1979–82. The pendulum swings. For balance—prospering economy, capital markets—since one person’s debt is another’s asset—you must keep rates not too high (not crush debtors), not too low (not hurt creditors). You see these cycles: zero rates, negative real rates—massive credit/money creation and borrowing. Then the cycle. That’s the look of the cycle.
Ray Dalio
If you have losses... classicly, weakening central bank control... or rather, central government strengthens control over central bank; when these things happen, they can't disagree. So central government gains greater control.
Tucker Carlson
Reporting?
Ray Dalio
No, I’ve just seen this movie.
Tucker Carlson
This...
Ray Dalio
Is what’s happening.
Tucker Carlson
Right, but that's what I mean. Its nature makes central bank/central government struggle during crisis, seeking control due to money...
Tucker Carlson
Must have it.
Ray Dalio
Right? If you’re president or leader and facing currency crisis—what happens? Like any fight, you don’t want infighting, you seek control—so there's a control struggle. We live in such a world now, who has power, struggle for control.
Tucker Carlson
At what point do we know the system is broken? The post-war experiment started in 1945, and now—needs new things?
Ray Dalio
You can almost only know in retrospect. If you... up close, when did they know it collapsed? Or, say, French Revolution—was there a day?
Tucker Carlson
Bastille Day.
Ray Dalio
Right? That day. Previous didn’t know. No, they didn’t know.
Tucker Carlson
Like when a prison gets stormed. They...
Ray Dalio
Didn’t know. Yes, correct. So it's not announced, or so clear-cut. You slide into those things gradually—never so clear a moment. But...
Tucker Carlson
Last year I asked you privately—I’ll never forget—I’m always a gold buyer, but I don't really understand. Just instinctively makes sense. A bit embarrassed. So I asked, is buying gold crazy? You said it's not crazy at all. I felt proved right, but wonder why don't more say so? Seems almost a financial conspiracy.
Ray Dalio
Not just about gold—but with anything. I think people get used to things. What's credible is their experience and era’s normal. Many see what's happening...
Ray Dalio
I hear people say they're shocked, but it's only because used to the prior state. If you travel in time—before 1971—you see history, the universality of money/gold, how the system repeats over time—you understand the dynamic. But people misunderstand. They think it’s a speculative metal. They don’t realize it’s actually a currency. Central banks—it’s the second biggest currency (held asset).
Ray Dalio
So, when you... it's almost like seeing costs through that currency (gold). And people instead view through the dollar lens, see gold rising.
Tucker Carlson
But, so you...
Ray Dalio
If you can see the world through gold, you see currency devaluation. So, because of their experience, it's hard to believe—like believing in the tooth fairy or Santa. Then through cycles you see—why surprises happen, why it's hard to believe. But if you read history, it’s almost logical.
Tucker Carlson
So you’re not surprised at what's happening or will happen. What wouldn’t surprise you in the near future? Start with gold. What’s spot price five years from now that won’t surprise you?
Ray Dalio
I don't want... that's headline speculation... let me say: yes, I think people are too focused on spot price up or down. What they don’t do is think: If I have no view on gold, how much in my portfolio should I hold? If you do a portfolio building exercise, say, what’s an effective diversified portfolio, what assets, how much? Gold is a very effective diversifier/hedge. In tough times, when other portfolio parts perform poorly, gold does well—like the 1970s, 1930s, as examples—it’s a diversification tool. So for individuals or central banks, the optimal amount may differ. But for individuals, depending on portfolio, maybe 5%-15%.
Ray Dalio
So, if you handle it that way, asking what should I own—you should own the amount we discussed about a year ago, depending on your portfolio—within that range. It's an effective diversifier, it's a currency—when traditional currencies do poorly, this does well. When they deliver interest, this is the opposite. That's what I want people to get: Do you have a little? What's your comfortable amount? But at least have some.
Tucker Carlson
If you were managing the US, or a country like the US, at its current position amid these changes—some inevitable, some not—what would you do to protect the country? What steps to help?
Ray Dalio
I'd handle... say, a budget deficit no more than 3%. I'd try to build financial... minimize/eliminate, but minimize the risk dynamic I mentioned.
Tucker Carlson
You'd keep budget deficit...
Ray Dalio
And I’d—I'd talk to every legislator—go to Washington, talk to bipartisan leaders. Like a ship, everyone on board steering for rocks. And everyone knows, if you have 6%-7% deficit to GDP, you’re heading for supply-demand trouble.
Ray Dalio
I’ve had those talks; that's consensus. I don’t care if you're left or right, just don’t hit the rocks. I'd set a 3% target and commit; if I can’t agree how to get there, I'd do three things proportionally: raise taxes, cut spending—say, raise taxes 4%, cut spending 4%—that improves supply-demand, lowers rates. Conveys the issue is handled. You also lower... debt interest? These two move it toward that 3%. But this is politically impossible.
Ray Dalio
So, in talks, the answer’s like, "Ray, you don’t understand politics. If I'm there, I have to make at least one promise, likely two: I won't raise your taxes, won't cut your benefits." You know, taxes, benefits. The big move is to try and grow out of trouble—again, fiscal and monetary stimulus, hope that with new technology, etc., enough income growth, making deficits move toward 3%. But unlikely.
Tucker Carlson
Why? Tech unlikely to be so beneficial/profitable that...
Ray Dalio
I think tech—not that AI/tech breakthroughs aren't a great miracle, very beneficial—I’ve studied great miracles, like electricity, imagine no electricity. But—well, you can describe what the 1920s would be like. Yet the ability to turn tech into enough productivity miracles...
Ray Dalio
I think, within our time frame, unlikely. So that's a problem. Debt and that dynamic remain a problem. Then, of course, dynamic of prosperity/productivity sharing—there's a huge wealth gap.
Ray Dalio
Now you see—let’s talk about wealth. I’ll go back to wealth. Some groups’ wealth is up dramatically—you know, wow, trillionaires. Right, that sort of thing. Also—60% of US readers are below sixth-grade level. Look at that level; how do you handle... must deal with the dynamic’s nature. So, how much productivity translates to income? How does government get income to deal with debt, so debt holders get real returns without trouble? How do you achieve this politically? Many things make it hard. I want to say something about wealth and wealth tax—it’s worth understanding. Wealth and money differ greatly. Wealth is easy to create—it's almost accounting. I can raise $50 million at $1 billion valuation—called a billionaire, wealth up $1 billion. But strictly, you must close those deals; wealth isn’t valuable unless converted to money. You have all that wealth, but can’t spend...
Tucker Carlson
Can't pay for dinner with it, Ray?
Ray Dalio
You must sell some to get money to pay. So when wealth grows far faster than money, you face risk conditions. Now, about wealth—
Tucker Carlson
Risk conditions.
Ray Dalio
Because... bubbles burst, right? When "I need money" moves arise. Usually because I need money to pay debt, right? People usually borrow to buy wealth. Now lots of borrowing—not only to buy stocks but companies buy back stock to create wealth. When they need money, as in all bubbles, lots borrowed to buy wealth. When money is needed, people must sell wealth for money. That creates dynamic.
Ray Dalio
You don’t tax wealth, OK? So, wealth becomes a political issue. Will you tax wealth? What happens in California? What happens elsewhere if taxed? If you tax wealth, imagine—
Tucker Carlson
That reduces its value, right?
Ray Dalio
That’s why bubbles pop.
Tucker Carlson
Bubbles, right?
Ray Dalio
Wealth is a political, market issue—needs understanding. So...
Tucker Carlson
Given how our wealth distributes among 350 million, do you see wealth tax coming as inevitable? Isn’t it unpredictable?
Ray Dalio
Seems so obvious, headline news, logical—everyone says, wait, all these people own all wealth, paid zero tax, while all else continues. We must get money where it is. So it seems so, but lack of full understanding how to manage it well. Yet it’s imminent.
Tucker Carlson
Indeed, and what happens. I think there's a California ballot measure.
Ray Dalio
Well... I think what’s happening is, around the world, people—in many ways—Californians are moving out. Not just happening, but fear of what might happen. You see the dynamic. I'm just a mechanic, of course.
Tucker Carlson
I get it. You're not judging; just describing what's happening. But as people move, domestically and abroad, do you have any guesses or observations about where people are going? Clearly, it’s Texas, Florida, Wyoming domestically. Globally, where?
Ray Dalio
Generally, people move to stable/opportunity-rich places, with little conflict. They want to go where there's low taxes but vibrancy—Vegas, Texas, Florida, as you said, the Middle East here, or vibrant, active places. You see migration patterns. Problem is, other places get hollowed out, as when people leave, the tax base... Roughly, top 10% pay about 80% or 76% of tax. If you lose half, you lose lots of revenue, creating a dynamic.
Tucker Carlson
Given all factors, can you see countries like ours continuing representative democracy?
Ray Dalio
I—I hope so. So do I. I just don't know. I think, deep down, most Americans really want that. Yes. But at the same time, irreconcilable differences exist. I think a recent poll—about 25% say they'd fight violently for their camp. That's a big percentage. Only a relatively small share needed. We can't take it for granted. Many things can’t be taken for granted; we should cherish those above all, but don't take them for granted.
Tucker Carlson
When you hear people casually talk about civil war—they do—what do you think?
Ray Dalio
I have a principle: If you’re worried, you don’t have to worry. If you aren’t worried, you need to worry. If you worry, you’re more apt to prevent what you worry about. So I think more worry is good. We shouldn’t take it for granted. We worry, so what do we do?
Tucker Carlson
I see people not worried, blindly saying—like with foreign policy: "Go in, you know, kill those guys," "We’ll be fine." I hear the same attitude on US civil war: "Well, we must have one." You've studied history’s civil wars. What are they like?
Ray Dalio
Civil and international wars are so horrific that every, you know, bravest person—the trumpet sounded, went in—ends up with deep regret. You can see... in the news, you see that, but just imagine how terrible war is. It's a cycle: your confidence and bravery rises the longer since last war.
Tucker Carlson
What’s the difference? Earlier you said money and wealth differ—wealth doesn’t easily convert to money in society. Where is the money? Who has it? Are those with wealth the same people?
Ray Dalio
No. Many have much wealth, little money; non-liquid assets. Yes. Money is... what you can trade—currency, short-term deposits, can quickly convert. That’s money. Central bank controls money. You see who has it—look at M0, M1, money market accounts, highly liquid, safe money, US treasuries, that sort. But ultimately it's central banks, because they control supply-demand.
Tucker Carlson
In volatile periods, central banks control currency supply in people’s hands.
Ray Dalio
It faces tradeoffs, right? Tradeoffs like...
Tucker Carlson
Like during COVID, right?
Ray Dalio
Or like 1971 with excessive claims. The tradeoff: people need money—to repay debt or other reasons—tempted to create money. You see fiscal/monetary policy coordination. Two waves of big deficits/central bank support: first, Trump during COVID start, then Biden after taking office—wanted more basic income; both sent out lots of checks, popular action. Fiscal discipline isn't liked; send checks, but where's money from? Central bank provides bonds, prints money, buys bonds. When within it, tightening isn’t easy.
Tucker Carlson
Final question: You describe the US as in stage five of a six-stage process.
Ray Dalio
But it’s not inevitable.
Tucker Carlson
Sure, but... it’s close to the end.
Ray Dalio
Time to worry.
Tucker Carlson
You go to Washington, try to convince policymakers, legislators: This is what you must do. You describe the response: "Hey, you don’t understand politics. We can’t do it." So obviously little progress, reasons clear.
Ray Dalio
What advice do you have for viewers—non-policymakers or just Americans—what can they do to prepare for anything coming?
Ray Dalio
Well, some basic principles. Earn more than you spend. Try to save. Diversify your portfolio. Think about money. Those are crucial. Think about the country, about opportunities—where are opportunities? People move from one place to another, follow vitality. Most important: raise your kids well—good education, productive, cultured, efficient. As I said, a country must do three things, so for individuals: educate kids, so they earn and act. Go where things work well—where there’s stability, productivity, opportunity. Avoid civil and international wars.
Tucker Carlson
These seem obvious.
Ray Dalio
If you do them, really, almost everything else resolves itself. Really.
Tucker Carlson
Ray Dalio, thank you.
Ray Dalio
Always a pleasure.
Tucker Carlson
Thank you.
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