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Dalio’s 10,000-word article reveals two major warnings: What will happen to our children in the next ten years?
This article is reprinted from International Students Daily
Public account ID: collegedaily
The latest 10,000-word long article by Ray Dalio, the founder of Bridgewater Associates, reveals that the destiny of the vast majority of mankind will be profoundly changed by this AI revolution in the next 5-10 years. The crisis will erupt in 2027.
The original economic and social rules will also undergo profound changes.
What kind of future will our children live in?
What will happen in the next 5-10 years?
Dalio’s latest warning: What will our children face in the next 5-10 years?
“Almost everyone’s destiny in the next 5 to 10 years will be profoundly changed by this AI revolution.”
This is not an exaggeration, but the latest warning from Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund.
Just recently, this legendary investor who accurately predicted the 2008 financial crisis and the COVID-19 epidemic published a 10,000-word long article. Different from previous technical analysis of the market, this time he set his sights further afield——World order in the next ten years。
After reading his analysis, a chill ran down my spine. If Dalio’s judgment is accurate, our generation, especially our children, will face a completely different world.
01
A core framework: Countries also have “birth, old age, sickness and death”
Dalio studied the rise and fall of empires over the past 500 years and discovered a surprising pattern: countries, like people, have their own life cycles.
He divided the interior of a country into six stages:
The first stage is the entrepreneurial period where everything is waiting to be done;
The second stage is a golden age in which everyone has hope; the third stage is a prosperous period in which bubbles inflate;
The fourth stage is the turning point of debt accumulation;
The fifth stage is a turbulent period in which internal conflicts intensify; the sixth stage is violent conflicts or even civil war.
Here’s the key point: Dalio clearly warned that the United States is now in a dangerous “stage five.”
What’s the meaning? It is what we often call “the eve of the civil war.” Of course, this does not mean that a war will break out in the United States tomorrow, but that social contradictions have accumulated to a critical point – the wealth gap is huge, the finances are on the verge of bankruptcy, and political polarization is serious. Everything is like the eve of the Great Depression in the 1930s.
Once this stage cannot be resolved through reform, the sixth stage awaits.
02
Two fatal warnings are becoming reality
Warning 1: The United States is headed for a “death spiral”
Dalio studied more than 50 civil wars and revolutions and came to a bloody conclusion:“Government fiscal bankruptcy” + “huge wealth gap” = the most reliable early warning of instability.
Today, this “toxic combination” has gathered in the United States.
Let’s look at finances first: U.S. government debt has soared to an alarming scale, with interest payments alone approaching $1 trillion. In layman’s terms, the United States is “borrowing new debts to repay old debts” and has entered a “death spiral” that is almost impossible to escape.
Looking at wealth again: The gap between rich and poor in the United States has reached its worst level since the Great Crisis of 1929. The richest 10% own nearly 67% of the wealth, while the bottom 50% own only 2.6%.
What is this concept? The wealth controlled by ten rich people is dozens of times that of more than 200 million poor people.
What will a young man do when he finds that he cannot afford to buy a house, get married, or raise a child despite all his efforts? He will no longer trust the system. When enough people stop believing, the system is close to collapse.
Warning 2: The biggest story in 2025 is not AI, but “currency devaluation”
Many people think that the protagonist of 2025 is AI, but Dalio said:The real story is in the currency markets.
He made a shocking comparison:
In gold terms, the S&P 500 will actually beLost 28%; Priced in gold, the U.S. ten-year Treasury bondLost 34%。
On the surface, U.S. stocks rose 18% and bonds rose 9%. But remove the filter of “currency devaluation”, and everything is revealed as it is –The purchasing power of U.S. dollar assets is being eroded.
Capital is on the move. In 2025, the stock markets of Europe, China, and emerging markets will all significantly outperform U.S. stocks. Global capital is voting with its feet, looking for new safe havens.
At the same time, in Dalio’s eyes, AI is in the “early stage of bubble“. The price-to-earnings ratio of the S&P 500 is close to the level during the Internet bubble in 1999, but actual earnings cannot support such a high valuation.
In other words: AI is very popular, but the current prosperity is supported by imagination and liquidity. Once the tide recedes…
03
2027: The tipping point when all conflicts break out at the same time?
In Dalio’s judgment, 2027 is an extremely special year.
He projected the three key cycles to 2027 and found that they are likely to reach critical points at the same time:
First, the currency and debt cycle: the limits of easing.
The Federal Reserve is using its easing policy to “buy time” and maintain the Ponzi debt system. But Dalio pointed out that this bubble needs to be punctured by monetary tightening, and this moment is likely to be in 2027. By then, if inflation rebounds or there is no one to take over the U.S. debt, the AI bubble and the mountain of debt will face a “big liquidation” at the same time.
Second, the internal political cycle: the final battle over wealth distribution.
The bottom 60% of people are suffering from the “affordability crisis”, while the top 10% of wealthy people barely feel inflation because they hold stocks. Dalio predicted that this contradiction will trigger a “violent conflict” between the far left and the far right in 2027-2028. This is not only an election, but also a decisive battle over the national line.
Third, the technology cycle: the test of AI from “story” to “reality”.
Dalio has warned that AI may surpass humans in most tasks by 2027. When the “technological singularity” comes, on the one hand, it may detonate productivity; on the other hand, if commercial profits fall short of expectations, huge valuations will face the cruel trial of “performance verification.”
What happens when three stacks are added together?
The policy toolbox will be completely ineffective – if you want to loosen, you will explode inflation; if you want to tighten, you will burst the bubble. The risk of social unrest will be at its peak. The capital market will no longer be a place to “calculate the rate of return”, but will become a battlefield to “ensure the safety of principal.”
04
How will this change affect our children?
Seeing this, you may be thinking: What do these macro trends have to do with me?
The relationship is too big. The three major trends pointed out by Dalio are directly affecting the wallet and future of every ordinary person through three channels:
First, the logic of debt strangles your savings.
What should the country do if it wants to repay its debt? Print money. What are the consequences of printing money? The purchasing power of cash in your hands shrinks. This is why the 2% interest you earn on your bank deposits will never beat actual inflation. This is not because the bank is cheating you, this is because the country is charging you a “debt tax” through inflation.
Second, the wealth gap strangles your opportunities.
When wealth is highly concentrated, social mobility dries up. In the past, you could start from scratch, but now good resources are firmly controlled by established forces. The “involution”, “lying flat” and “Buddha type” you feel today are essentially stress reactions after opportunities have dried up.
Third, conflicts between major powers will strangle your future.
When the decoupling between China and the United States becomes the norm, your career choice, investment direction, and even your place of residence may be subverted overnight. Huawei’s supply was cut off and Chinese concept stocks were threatened with delisting. These are not isolated incidents, but the projection of conflicts between major powers at a micro level.
05
How do ordinary people weather this storm?
Although Dalio painted a grim picture, he also gave survival rules that ordinary people can practice:
Rule 1: Turn yourself into “productive capacity that cannot be taken away.”
What assets cannot be taken away by any regime or crisis? Your brain, your craft, your skills, your health. In this turbulent era,Investing in yourself is always the most profitable business。
Rule 2: Understand the cycle and don’t go against the trend.
When the world enters a de-globalization cycle, if you are still involved in the foreign trade industry, it is counter-cyclical. When the debt cycle enters the deleveraging stage, if you buy a house with high leverage, it is countercyclical. Read more history and look at the macro picture. The trend is your friend, not your enemy.
Rule 3: Maintain fluidity. Only by living can you have a future.
Dalio repeatedly emphasized:During the war, liquidity is ten thousand times more important than income.You never know what will happen tomorrow. Keep enough 6-12 months of living expenses on hand and maintain an asset allocation that can be liquidated at any time, so that you can deal with any storm calmly.
Dalio wrote at the end of the article: “Every world power has its moments of glory, but they all eventually decline. Some declines are more peaceful and less traumatic.”
We cannot prevent the storm from coming, but we can decide how we will face it.
As international students and the younger generation, we may be standing at the door of an unprecedented era. Understand these trends, not to panic, but to be prepared——
After the storm passes, only those who survived will be eligible to participate in the next round of prosperity.
And all you have to do is let yourself become that person.
(The content of this article is synthesized from Ray Dalio’s 2025-2026 series of research and is for reference only and does not constitute investment advice.)
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