Billionaire Ray Dalio says the US has become a “powder keg” and fears “civil war”

Bridgewater Associates founder Ray Dalio has a new warning about the United States: the country is on a collision course to repeat history.

The billionaire investor said current national crises — from federal agents killing people in Minneapolis to the skyrocketing national debt — signal a transition to a more violent phase of the American “Great Cycle.”

Also read: Ray Dalio says Trump has already ended the rules of the global order: ‘Let’s not be naive’

“The United States is now a powder keg,” he warned in a long essay published in X on Monday (26), titled “Money, civil and international war, Minneapolis and beyond — in perspective.”

The text relies heavily on his 2021 book, “Principles for Dealing With the Changing World Order”, in which he analyzes 500 years of history to explain why some countries prosper and others fail, describing a six-stage cycle, lasting 80 years, that follows the evolution of a society’s monetary, internal and international order.

In his X post, Dalio said it is in President Donald Trump’s hands to move away from civil conflict or move closer to it.

“Many people are waiting to see whether President Trump will continue to fight, which I believe risks pushing us over the edge into a clearer civil war, or whether he will make an attempt to pull us back from the abyss by calling for peace, promising and demonstrating that the justice system will adequately handle the shootings and curb the activities of ICE,” he wrote.

For years, Dalio has used his Great Cycle framework to warn that the U.S. is deeply embedded in what he calls Stage 5 — the “pre-collapse phase,” characterized by poor financial conditions and internal conflict — and is in danger of teetering toward Stage 6, which he defines as the “final and most painful stage,” marked by the collapse of the existing order through civil war or revolution.

In the past, he has sounded the alarm about rising economic inequality and political polarization. And last week, he said in a conversation with Fortune in Davos that we are now dealing with the “collapse of the monetary order” as the national debt has reached $38 trillion, which he called a common symptom of empires in decline.

On the edge of the abyss in Minneapolis

In his most recent post, Dalio argued that the deaths in Minneapolis and the soaring national debt together suggest that the US may be moving from Stage 5 to Stage 6.

He cited excerpts from his 2021 book in which he asserted that “people dying in clashes” is a sign that “almost certainly indicates progression to the next, more violent stage of civil war,” and that the intensification of disputes between the federal government and the states is a classic historical marker of civil conflict.

He also included an excerpt stating that “the most reliable leading indicator of civil war or revolution is a government with broken finances combined with wide disparities in wealth.”

Dalio has been approaching this conclusion for several years. In 2024, he warned that the US risked full-scale civil conflict if one side did not accept the result of the presidential election.

And, in an essay published that same year in Time, he stated that the “risk of some kind of civil war is uncomfortably higher than 50%.”

Regardless of what path Trump takes following the Minneapolis deaths, Dalio said, the US is already in a heightened state of tension.

“While his choice has huge implications for what comes next, including possibly lighting the powder keg, it is nonetheless important to see everything that is happening in the context of all the forces and events that are driving the Great Cycle,” he added.