Ray Dalio Warns: History Is Repeating Itself—How Far Are We From a Full-Scale Collapse?
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Ray Dalio Warns: History Is Repeating Itself—How Far Are We From a Full-Scale Collapse?
Creating efficient, win-win relationships through skilled collaboration—growing the pie together and dividing it fairly to make the majority happy—is far more valuable—and far less painful—than waging civil wars over wealth and power that result in one side enslaving the other.
Navigating Web3 tides with focused insightsAuthor: Ray Dalio
Translated and edited by: TechFlow
TechFlow Intro: Legendary investor Ray Dalio issues a stark warning about today’s global turbulence, grounded in his “Big Cycle” theory. He meticulously dissects how societies slide from Stage 5—characterized by extreme wealth inequality and fiscal insolvency—into Stage 6, where conflict erupts. This article is not merely a summation of historical patterns but a deep diagnosis of the current political and economic landscape in the United States and globally. By drawing parallels with the collapse of the 1930–1945 era, Dalio identifies dangerous signals—including eroding institutional rules, intensifying polarization, and the loss of shared truth.
For me, observing what is happening now feels like watching a movie I’ve seen many times before in history. As a global macro investor, I position myself for the future by studying historical lessons to understand the underlying mechanisms that drive how things work. I’ve found that what’s unfolding now has repeatedly occurred for the same reasons—and understanding those cause-and-effect relationships has been immensely helpful to me.
I’m now at a stage in life where I care more about sharing insights that have helped me than about hoarding them for personal gain. For this reason, in my book Principles for Dealing with the Changing World Order, I describe the typical sequence of events that lead to the rise and fall of monetary orders, domestic political orders, and international geopolitical orders. I call this sequence the “Big Cycle,” because it is enormous in scale and long in duration—typically lasting about 80 years (roughly one human lifetime).
The last time these orders collapsed was during 1930–1945, giving rise to the postwar monetary, domestic political, and international geopolitical orders that began in 1945—and which we are now witnessing collapse. My book comprehensively outlines the symptoms that help identify which stage of the Big Cycle we’re in, as well as the forces driving it. Most importantly, I detail the typical processes and sequences of events that usually cause monetary, domestic political, and international geopolitical orders to collapse—so people can compare actual developments against this template.
For readers who have read the book, it should now be clear: we stand on the edge of transitioning from Stage 5 (immediately before the collapse of the existing order) into Stage 6 (the collapse itself).
I wrote that book with two aims: 1) to help policymakers understand the collapse process and prevent it; and 2) to help individuals protect themselves from its damage. While doing so, I realized my explanations might not substantially alter the trajectory—and indeed, they haven’t.
Nonetheless, since we are clearly standing on the threshold between Stage 5 (pre-collapse) and Stage 6 (collapse), and the choices made now could dramatically affect the outcome, I feel compelled to restate the key dynamics hidden beneath the surface—and clarify which choices will lead to better or worse outcomes.
To illustrate this point here, I’ll briefly share the most relevant parts of Principles for Dealing with the Changing World Order—particularly those explaining how Stage 5 (the pre-collapse phase) leads into Stage 6 (the collapse phase). This will allow you to compare the current situation against my Big Cycle template. It must be emphasized that although restoring monetary order through the financial discipline required for fiscal health is highly unlikely—and although the prospects for reviving rule-based domestic political and international geopolitical orders, essential for peaceful dispute resolution and democratic functioning, remain doubtful—such improvements are still possible, because we have not yet fully crossed the threshold from Stage 5 to Stage 6.
Below is an excerpt from the book depicting this picture. After sharing it, I’ll explain how what I wrote five years ago applies to today’s situation (see “Where We Are Now,” below).
“Stage 5: When Financial Conditions Are Poor and Conflict Is Intense”
“Because I covered that cycle comprehensively in Chapters 3 and 4, I won’t elaborate here. But to understand Stage 5, you need to know it follows Stage 3 (peace and prosperity, favorable debt and credit conditions) and Stage 4 (excess and decadence begin to worsen conditions). This process peaks in the most difficult and painful stage—Stage 6—when national finances are exhausted, typically triggering horrific conflict in the form of revolution or civil war. Stage 5 is the period when interclass tensions, driven by worsening financial conditions, reach their apex. How different leaders, policymakers, and groups handle conflict profoundly affects whether a nation undergoes necessary change peacefully or violently.”
“The Classic Toxic Combination”
“The classic toxic combination of forces that trigger major internal conflict consists of: 1) the nation and its people (or states, cities) being in poor financial shape (e.g., carrying massive debt and non-debt obligations); 2) huge income, wealth, and values gaps within the entity; and 3) severe negative economic shocks. ‘This confluence typically leads to chaos, conflict, and sometimes even civil war.’”
“To achieve peace and prosperity, a society must generate productivity that benefits most people.
Average levels matter less than the proportion of people suffering—and their collective power.” In other words, risk rises when broad-based productivity and prosperity are absent.
A key success factor is that newly created debt and money are used to boost productivity and yield positive investment returns—not simply distributed without generating productivity or income growth. If money is merely distributed without yielding such returns, it will depreciate until governments—or anyone else—lose purchasing power.
History shows that lending and spending directed toward projects that broadly raise productivity and generate investment returns exceeding borrowing costs lead to rising living standards and debt repayment—making them sound policies.”
“History—and logic—demonstrate that high-quality investments in education at all levels (including vocational training), infrastructure, and research that yields productive discoveries are extremely effective. For example, large-scale education and infrastructure programs almost always pay off (e.g., under the Tang Dynasty and many other Chinese dynasties, the Roman Empire, the Umayyad Caliphate, the Mughal Empire in India, Japan’s Meiji Restoration, and China’s education development plans over recent decades), though their impact takes time. Indeed, improvements in education and infrastructure—even those financed by debt—are near-universal prerequisites for imperial ascendancy, while declining quality in such investments almost invariably accompanies imperial decline. Done well, these interventions can offset the classic toxic combination.” In Stage 5, this does not happen.
All this makes the economy more vulnerable to economic shocks. “Economic shocks may arise from many causes—including bursting financial bubbles, natural disasters (e.g., pandemics, droughts, floods), and wars. They constitute a stress test. The financial condition at the time of the stress test—measured by income relative to spending, and assets relative to liabilities—acts as the shock absorber. The size of income, wealth, and values gaps is the best indicator of systemic fragility.”
“When financial problems arise, they typically hit the private sector first, then the public sector. Because governments never let private-sector financial problems bring down the entire system, the government’s financial condition is paramount. Collapse occurs when governments lose purchasing power. But en route to collapse, there is intense struggle over money and political power.”
“Research into over 50 civil wars and revolutions clearly shows that the single most reliable leading indicator of civil war or revolution is bankrupt government finances combined with massive wealth inequality. This is because when governments lack financial strength, they cannot financially rescue the private entities they need to sustain the system (as most governments did—including the U.S.—at the end of 2008); they cannot buy needed goods or pay people to do what’s required. They lose power.”
“A classic marker of Stage 5—and a leading indicator of losing the ability to borrow and spend (one trigger for entering Stage 6)—is when governments run huge deficits that produce more debt than buyers other than the government’s own central bank are willing to purchase. This indicator is activated when non-monetary-printing governments must raise taxes and cut spending, or when monetary-printing governments print heavily and buy large amounts of government debt. More specifically, when governments exhaust their funds (via massive deficits, enormous debt burdens, and insufficient access to credit), their options narrow sharply. They must either sharply raise taxes and cut spending—or print heavily, causing currency depreciation. Governments with monetary-printing authority always choose the latter, because it’s far less painful—but it drives investors away from the currency and debt being printed. Governments without printing authority must raise taxes and cut spending, prompting the wealthy to flee the country (or state, city), as higher taxes and reduced services become unbearable. If such non-printing entities face massive wealth gaps among their constituents, these measures often spark some form of civil war/revolution.”
“Places (cities, states, and nations) with the largest wealth gaps, greatest debt burdens, and steepest income declines are most likely to experience the most violent conflict. Interestingly, in the U.S., the states and cities with the highest per capita income and wealth levels are often also those with the heaviest debt burdens and widest wealth gaps—for example, San Francisco, Chicago, and New York City, and states including Connecticut, Illinois, Massachusetts, New York, and New Jersey.”
“Faced with these conditions, spending must be cut—or more funding must be raised somehow. The next question becomes: who pays to fix these problems—the ‘haves’ or the ‘have-nots’? Clearly, it cannot be the have-nots. Spending cuts are hardest on the poorest, so higher taxes must fall on those able to pay more—increasing the risk of some form of civil war or revolution. Yet when haves realize they’ll be taxed to repay debt and reduce deficits, they typically choose to leave—triggering a ‘hollowing-out’ process. This is precisely what’s now driving migration across U.S. states. If economic conditions worsen, this accelerates. These dynamics largely drive the tax cycle.”
“History shows that raising taxes and cutting spending amid massive wealth inequality and poor economic conditions is a stronger leading indicator of civil war or revolution than any other factor.”
“Populism and Extremism”
“Amid chaos and discontent, strong-willed, anti-elite leaders emerge who claim to fight for ordinary people. They’re called populists. Populism is a political and social phenomenon that appeals to ordinary people whose concerns feel ignored by elites. It typically arises amid wealth and opportunity gaps, perceived cultural threats from foreign or domestic values, and failure of ‘establishment elites’ in positions of power to effectively serve the majority. When these conditions fuel anger among ordinary citizens—prompting them to seek politically powerful fighters to battle on their behalf—populists rise to power.
Populists can be left- or right-wing, and they tend to be far more extreme than moderates, appealing directly to ordinary people’s emotions. They are typically combative rather than collaborative, and exclusive rather than inclusive. This leads to fierce struggles between left- and right-wing populists over irreconcilable differences. Revolutionary intensity under their leadership varies widely. For example, in the 1930s, left-wing populism took communist forms, while right-wing populism adopted fascist forms; the U.S. and UK underwent nonviolent revolutionary change. Four democracies became authoritarian regimes.
More recently in the U.S., Donald Trump’s 2016 election marked a shift toward right-wing populism, while Bernie Sanders, Elizabeth Warren, and Alexandria Ocasio-Cortez’s popularity reflected rising left-wing populism. Across many countries, populist political movements are gaining ground.”
“Watch populism and polarization as markers. The higher the populism and polarization, the farther a nation has progressed through Stage 5—and the closer it is to civil war and revolution. In Stage 5, moderates become a minority. In Stage 6, they vanish.”
“Class Warfare”
“In Stage 5, class warfare intensifies. This happens because, as a rule, during periods of hardship and escalating conflict, people increasingly view others stereotypically—as members of one or more classes—and treat those classes as enemies or allies. In Stage 5, this begins becoming markedly evident. In Stage 6, it becomes dangerous.”
“A classic marker of Stage 5—and one that intensifies in Stage 6—is the demonization of people from other classes, often producing one or more ‘scapegoat’ classes widely blamed as the root cause of problems. This fuels drives to ostracize, imprison, or destroy them—a dynamic that escalates in Stage 6. Ethnic, racial, and socioeconomic groups are frequently demonized. The most classic, terrifying example is the Nazis’ treatment of Jews, who were scapegoated and persecuted for nearly all of Germany’s problems.
Overseas Chinese minorities have also been demonized and scapegoated during periods of economic and social stress. In Britain, Catholics were similarly demonized and scapegoated during many stressful periods—for example, the Glorious Revolution and the English Civil War. Wealthy capitalists are commonly demonized, especially those perceived as profiting at the expense of the poor. Demonization and scapegoating are critical symptoms we must monitor closely.”
“Loss of Truth in the Public Sphere”
“As people grow more polarized, emotional, and politically motivated, ignorance of truth—due to media distortion and propaganda—increases.”
“In Stage 5, participants in the struggle typically collaborate with media to manipulate emotions for support and to destroy opponents. In other words, left-wing media figures join the left-wing camp, and right-wing media figures join the right-wing camp, engaging in this dirty fight. Media become like vigilantes—people are routinely attacked on air and effectively tried and convicted without judges or juries, ruining lives.
A common move by both left-wing (communist) and right-wing (fascist) populists in the 1930s was controlling media and appointing ‘ministers of propaganda’ to steer narratives. Their media explicitly aimed to turn the public against groups the government labeled ‘enemies of the state.’ Even Britain’s democratic government, during both world wars, established a ‘Ministry of Information’ to disseminate government propaganda—rewarding major newspaper publishers who cooperated in winning the propaganda war, and smearing or punishing those who didn’t.
Revolutionaries engaged in similar truth distortions across publications. During the French Revolution, revolutionary-run newspapers fomented anti-monarchist and anti-religious sentiment—but once revolutionaries seized power, they shut down dissenting papers during the Reign of Terror. In eras of massive wealth inequality and surging populism, stories attacking elites often thrive and prove profitable—especially those targeting left-leaning elites in right-leaning media, and vice versa. History shows that sharp increases in such activities are typical of Stage 5; when coupled with the capacity to impose other penalties, media transform into potent weapons.”
“Rules Fade, Primal Fighting Begins”
“When people’s passionate commitment to a cause outweighs their commitment to the decision-making system, that system is endangered. Rules and laws only function effectively when they’re crystal clear—and when most people value them enough to compromise within them to keep them working well.”
“If neither condition holds, the legal system becomes precarious. If competing parties refuse to maintain rationality and pursue collective welfare civilly—which requires sacrificing some desired outcomes, even if they’d win in battle—to make decisions, a civil war emerges to test relative strength. At this stage, winning at all costs becomes the rule, and dirty tactics become normal. Late in Stage 5, reason gives way to passion.”
“When victory becomes the sole objective, unethical fighting grows ever more powerful in a self-reinforcing loop. When everyone champions a cause and no consensus emerges, the system stands on the brink of civil war or revolution.”
“This typically unfolds in several ways: late in Stage 5, legal and police systems are often weaponized by those who control them. Also, private policing systems emerge—for example, thugs who assault others and seize assets, and bodyguards who protect people from such attacks. For instance, before seizing power, the Nazi Party formed a paramilitary wing; after taking power, it became official state force. The short-lived British Union of Fascists in the 1930s and the U.S. Ku Klux Klan were likewise paramilitary organizations. Such cases are common—so watch their emergence as markers of entry into the next stage.”
“Late in Stage 5, protests multiply and grow increasingly violent. Because the line between healthy protest and revolutionary beginnings isn’t always clear, those in power struggle to permit protest while denying perceived freedom to rebel against the system. Leaders must manage these situations carefully. A classic dilemma arises when demonstrations cross into revolution. Both permitting protest freely and suppressing it carry risks for leaders—either path could empower revolutionaries enough to topple the system.
No system permits people to overthrow it—in most systems, such attempts constitute treason, often punishable by death. Yet revolutionaries’ job is to topple the system, so governments and revolutionaries continually probe each other’s boundaries. When widespread grievances simmer and leaders ignore them, they may boil over—exploding when leaders try to suppress them. Late-Stage-5 conflicts typically build to a climax, triggering violent combat that historians officially label as civil war—and which I define in the Big Cycle as Stage 6.”
“Deaths in fighting mark the transition—it almost certainly signals entry into a more violent civil-war phase, lasting until victory is clear.”
“This brings me to my next principle: When in doubt, get out—if you wish to avoid civil war or war, leave while conditions remain good.” “This usually happens late in Stage 5. History shows that when conditions worsen, people want to relocate to places with better conditions—and doors often close for those wishing to leave. Investments and money face the same fate, as nations introduce capital controls and other measures during such periods.”
“The transition from Stage 5 (extremely poor financial conditions and intense internal and external conflict) to Stage 6 (civil war) occurs when the system for resolving disagreements shifts from functioning to nonfunctioning. In other words, it happens when the system collapses beyond repair, people inflict violence upon each other, and leadership loses control.”
“When a nation is in Stage 5 (like the U.S. today), the biggest question is how much the system can bend before breaking.” “Democracies let people do almost anything they decide—producing more flexibility, because people can replace leadership and blame only themselves. Democracies have also proven prone to collapse amid massive conflict. Democracy requires consensus-driven decision-making and compromise—demanding robust cooperation among large numbers holding opposing views. This ensures representation for parties with significant voter bases—but like any large committee with wildly divergent (even mutually hostile) views, the decision-making system is inefficient.”
Over 2,000 years ago, Plato’s The Republic brilliantly described how democracies collapse; it remains a fitting commentary on what’s unfolding today—nothing new here.
“The greatest risk facing democracies is that their decisions become so fragmented and adversarial that they’re inefficient—leading to poor outcomes, which in turn trigger revolutions led by populist autocrats representing the majority who yearn for a strong, capable leader to control chaos and make the nation work well for them.”
“Equally noteworthy: history shows that during periods of massive conflict, federalist democracies (like the U.S.) typically clash over relative powers between states and central government. This is a marker worth watching—currently scarce in the U.S.; once it emerges, it signals sustained progression toward Stage 6.” Clearly, by 2026, this is occurring—and may intensify.
“Stage 5 is a fork in the road: one path leads to civil war or revolution; the other, to peaceful—and ideally prosperous—coexistence. Peace and prosperity are clearly the ideal path, yet also the hardest to achieve. This path demands a strong leader capable of inspiring the majority—not dividing them—and motivating them to undertake the hard work needed to fix problems and restore national strength. These leaders—Plato’s ‘benevolent despots’—unite opposing sides to perform the arduous tasks required to reshape the order so it functions fairly for most (i.e., productively and beneficially for most). Historically, such cases are exceedingly rare. The second type is the ‘strong fighter,’ who leads the nation through the hell of civil war or revolution.”
Stage 6: Civil War Period
“Civil wars inevitably occur—so rather than assuming ‘this won’t happen here’—a belief held by most people in nations enjoying long civil-war-free periods—remain vigilant and watch for markers indicating proximity.”
“Though countless examples illuminate how they operate, I selected 29 I consider most important, shown in the table below. I grouped them into those causing major system/regime changes and those that didn’t. For example, the U.S. Civil War was extremely bloody but failed to overthrow the existing system or order—placing it in the second group at the bottom; cases toppling systems or orders appear above. These categories are inevitably imprecise—but again, we won’t let imprecision block our view of truths invisible without approximation. Most (though not all) of these conflicts unfolded as described in this section.”
Caption: List of major historical conflicts that triggered systemic change
“A classic example of civil war destroying a system and forcing creation of a new one is the 1917 Russian Revolution and civil war. This established a communist domestic order, which entered Stage 5 in the late 1980s and attempted revolutionary reform within the system—known as ‘perestroika’ (restructuring)—but failed, culminating in the Soviet order’s collapse in 1991. The communist domestic order lasted 74 years (1917–1991). It was replaced by Russia’s current system/order, established post-collapse in the classic manner described earlier in this chapter for Stages 1 and 2.”
“Another case is Japan’s Meiji Restoration, born from a three-year revolution (1866–69). It erupted because Japan’s isolationist policy had stalled progress. American pressure forced Japan open, prompting a revolutionary group to challenge and defeat the ruling military shogunate—toppling Japan’s domestic order, then operated by four classes: samurai, farmers, artisans, and merchants.
This old Japanese order, run by traditionalists, was extremely conservative (e.g., social mobility was illegal), replaced by relatively progressive revolutionaries who restored the modern emperor’s authority and transformed everything. Early in this period, labor disputes, strikes, and riots surged due to classic triggers: wealth gaps and poor economic conditions. During reforms, leadership provided universal elementary education for boys and girls, adopted capitalism, and opened the nation to the world. Leveraging new technologies, they became highly competitive and wealthy.”
“Many such cases exist—some nations undertook correct actions to generate revolutionary, beneficial improvements, while many revolutionaries made catastrophic errors, inflicting decades of terrible suffering on their peoples. Incidentally, thanks to its reforms, Japan completed the classic stages of the Big Cycle. It became extraordinarily successful and wealthy. But over time, it grew decadent, overextended, and fractured—enduring the Great Depression and costly wars—all contributing to its classic demise. Its Meiji order and classic Big Cycle lasted 76 years (1869–1945).”
“Civil wars and revolutions inevitably occur to fundamentally transform domestic orders.”
“They involve total restructurings of wealth and political power—including complete reshaping of debt and financial ownership, and restructuring of political decision-making mechanisms. These transformations are natural outcomes of the need for massive change impossible within the existing system. Almost all systems encounter them—because almost all systems benefit some classes at the expense of others, eventually becoming intolerable and sparking battles to determine the path forward.
When wealth and values gaps widen drastically—and poor economic conditions follow—rendering the system dysfunctional for a large portion of the population, people fight to change it. Those suffering most economically fight to seize greater wealth and power from those who hold wealth, power, and benefit from the existing system. Revolutionaries naturally seek to overhaul the system entirely—so they naturally reject laws demanded by those in power. These revolutionary changes typically unfold violently via civil war, though—as noted—they can also occur peacefully without toppling the system.”
“Civil-war periods are typically extremely brutal. Often, early battles are disciplined, orderly power struggles—but as fighting and emotion escalate, and all sides resort to any means to win, brutality accelerates unexpectedly. Actual cruelty in Stage 6 civil wars and revolutions would seem impossible during Stage 5. Elites and moderates typically flee, are imprisoned, or killed. Reading accounts of civil wars and revolutions—like the Spanish Civil War, Chinese Civil War, Russian Revolution, and French Revolution—chills me.”
“How do they happen? Earlier, I described Stage 5 dynamics pushing across the threshold into Stage 6. In this stage, all these factors intensify dramatically. I’ll explain.”
“How Civil Wars and Revolutions Happen”
“As previously described, the cycle of wealth creation and wealth disparity leads to a tiny elite controlling an extremely high share of wealth—ultimately provoking the impoverished majority to overthrow the wealthy few via civil war and revolution. This has happened more times than imaginable.”
“While most typical civil wars and revolutions shift power from right to left, many shift wealth and power from left to right. However, the latter are fewer and distinct. They typically occur when the existing order slides into dysfunctional anarchy—and most people crave strong leadership, discipline, and productivity.
Examples of left-to-right transitions include Germany, Spain, Japan, and Italy in the 1930s; the Soviet Union’s collapse in the late 1980s–early 1990s; Argentina’s 1976 coup replacing Isabel Perón with a military junta; and the coup leading to France’s Second Empire in 1851. In every case I studied, success or failure stemmed from identical causes. Like left-wing revolutions, these new domestic orders succeeded when delivering broad economic success—and failed when they didn’t. Because broad economic prosperity is the greatest determinant of new regime success or failure, long-term trends show rising total wealth and widening wealth distribution (i.e., improved economic and health conditions for ordinary people). This macro-view is easily overlooked when immersed in a specific stage of the Big Cycle.”
“Typically, leaders of civil wars or revolutions were (and remain) well-educated, middle-class individuals. For example, three key revolutionary leaders of the French Revolution were: Georges-Jacques Danton, a lawyer raised in a bourgeois family; Jean-Paul Marat, a physician; and Maximilien Robespierre, also a lawyer.
Russian Revolution leaders included Vladimir Lenin, born into an educated middle-class family (his father was a senior civil servant); and Leon Trotsky, from a wealthy peasant family. Chinese Communist Revolution leaders included Mao Zedong, from a wealthy peasant family; and Zhou Enlai, from a scholar-gentry family. Fidel Castro came from a very wealthy plantation-owning family and began political activity while studying law. Officers who steered Japan toward right-wing populism and fascism in the 1930s were mostly middle-class. As these examples show, leaders rarely come from poverty—but from knowledgeable, visionary classes capable of organizing masses.”
“These leaders also typically possess extraordinary charisma, enabling strong collaboration and building powerful, well-functioning organizations—granting them revolutionary force. To spot future revolutionaries, watch for individuals with these traits. Over time, they often evolve from idealistic intellectuals seeking fairer systems into ruthless revolutionaries pursuing victory at any cost.”
“Although massive wealth inequality during economic hardship is usually the greatest conflict catalyst, other causes accumulate—building massive opposition to leadership and institutions. Typically in revolutions, revolutionaries with differing agendas unite to push revolutionary change; though united during revolution, they usually fight each other afterward over specifics and power.”
“As noted earlier, during the civil-war/revolution phase of the cycle, governing authorities almost always face severe shortages of funds, credit, and purchasing power. This scarcity fuels desires to seize money from the wealthy—prompting asset holders to move assets to safe jurisdictions and assets, triggering government-imposed capital controls—restricting transfers to other jurisdictions (e.g., foreign countries), other currencies, or harder-to-tax and/or less-productive assets (e.g., gold).”
“Worse still, domestic turmoil makes external enemies more likely to challenge the nation. Domestic conflict-induced vulnerability increases the likelihood of external war. Internal conflict divides citizens, drains them financially, and distracts leadership—creating openings for foreign powers to exploit weakness. This is the main reason civil and external wars often follow each other.
Other reasons include: heightened emotions and tempers; strong populist leaders who naturally emerge during such times; leaders leveraging perceived external enemy threats to rally national unity—and thus encouraging conflict; and scarcity driving populations/nations to fight for needed resources (including those held by other nations).”
“Almost all civil wars involve foreign powers attempting to influence outcomes for their own gain.”
“The start of civil wars and revolutions isn’t clear when they happen—though obvious when deeply immersed. While historians assign start/end dates, these are artificial. In reality, almost no one knew a civil war had begun—or ended—yet all knew they were in one. For example, many historians date the French Revolution’s start to July 14, 1789—the Bastille’s storming. But no one then saw it as the Revolution’s beginning—or foresaw how horrific and brutal the civil war and revolution would become. Though people may not predict the future, fuzzy markers help locate one’s position, discern direction, and anticipate the next stage.”
“Civil wars are extremely brutal because they’re fights for survival. Everyone becomes an extremist—forced to pick sides and fight—and in hand-to-hand combat, moderates always lose.”
“Regarding leadership best suited for civil war and revolution: ‘inspirational generals’—powerful enough to rally support and win essential battles. Because fighting is brutal, they must be ruthless enough to win by any means necessary.”
“Historians’ designated civil-war periods typically last several years and determine formal victory—usually marked by occupation of the capital’s government buildings. But like starts, ends aren’t as clear-cut as historians portray. After formal civil war ends, battles to consolidate power may persist for years.”
“Though civil wars and revolutions are typically excruciating, they often trigger restructuring—and if handled well, can lay foundations for improved future outcomes. Post–civil-war/revolution futures depend entirely on how subsequent steps are managed.”
Current Situation: Minneapolis and America on a Powder Keg
Let’s now focus on major recent events: the killing of a second ICE protester in Minneapolis. Two classic markers of the transition from Stage 5 to Stage 6 appear underway:
- “Deaths in fighting mark the transition—it almost certainly signals entry into a more violent civil-war phase, lasting until victory is clear.”
- “History shows that during periods of massive conflict, federalist democracies (like the U.S.) typically clash over relative powers between states and central government.”
America today is a powder keg. According to the latest PBS News/NPR/Marist poll, nearly one-third (30%) of Americans say people may need to resort to violence to set the nation right. Pew Research Center (September–October 2025) found 85% of U.S. adults acknowledge politically motivated violence is increasing.
An analysis by the Center for Strategic and International Studies (CSIS) found 21 partisan political attacks or plots occurred between 2016 and 2024—versus just two in the preceding 25+ years. That’s roughly a tenfold increase in politically motivated plots/attacks over a short span. The U.S. has more guns than people—and many carry violent tendencies.
Undoubtedly, conflict between the federal government and Minnesota (and other state governments) is severe—and appears poised to worsen. The world watched the killings of two protesters opposing Trump’s ICE plan in Minneapolis—and now watches to see which side backs down. Many await whether President Trump will continue fighting—I believe risking pushing us toward explicit civil war—or attempt pulling us back from the brink by calling for peace, pledging—and proving—the justice system will properly handle the shootings, and scaling back ICE operations. (In a Wall Street Journal interview, he stated the government would review the killings and said ICE wouldn’t remain in Minneapolis indefinitely.)
Though his choice will hugely impact what follows—including possibly igniting the powder keg—it’s vital to view everything unfolding against the backdrop of all forces and events driving the Big Cycle. Regardless of this Minneapolis case’s outcome, these are powerful, evolving forces shaping how the Big Cycle progresses.
Conclusion (excerpted from Principles for Dealing with the Changing World Order)
“My study of history tells me nothing is eternal except evolution. Within evolution, cycles ebb and flow like tides—difficult to change or resist. To navigate these changes well, one must understand which stage of the cycle one occupies—and master timeless, universal principles for handling it.
As conditions change, optimal responses change too—what’s best depends on context, and context constantly shifts in the ways we just observed. Thus, rigidly believing any economic or political system is eternally best is a mistake—because circumstances will inevitably arise where that system fits poorly; if a society fails to adapt, it perishes.
That’s why continuously reforming systems to suit changing environments is optimal. Any system’s test is simple: how well does it deliver what most people want? This can be objectively measured—and we are, and will continue to, measure it.
That said, history’s loudest, clearest lesson is this: skillfully collaborating to create efficient win-win relationships—expanding the pie and dividing it fairly so most feel satisfied—is vastly more valuable—and far less painful—than waging civil war over wealth and power, ending in one side enslaving the other.”
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