Abstract
Ray Dalio argues that the world is in the early stages of a prolonged "world war" that is unlikely to end soon. This conflict is not a single declared war but a combination of multiple regional hot wars (e.g., Russia-Ukraine, Israel-Gaza, US-Iran) and non-shooting wars (economic, technological, capital, and geopolitical influence wars). These interconnected conflicts are reshaping global order, driven by shifting alliances, resource competition, and the weaponization of critical trade routes like the Strait of Hormuz.
Key powers are aligning into opposing blocs: China, Russia, Iran, and North Korea versus the US, Israel, Gulf states, Japan, and Australia. Dalio emphasizes that victory in such conflicts depends not on absolute strength but on which side can endure prolonged pain and resource depletion. He warns that the US, while powerful, is overextended globally and may struggle to manage multiple fronts simultaneously.
The current phase resembles historical pre-war periods (e.g., 1913–1914, 1938–1939), where economic and military tensions escalate into broader conflicts. Dalio urges observers to look beyond short-term events and focus on structural shifts: rising debt, internal political pressures, and the erosion of the US-led multilateral order into a "might-makes-right" system. He assesses a >50% probability of at least one major conflict escalating within five years, including scenarios in Ukraine, Korea, or the South China Sea.
Original Title: The Big Thing: We Are In A World War That Isn’t Going To End Anytime Soon
Original Author: Ray Dalio
Original Compilation: Peggy, BlockBeats
Editor's Note: While the market continues to price in short-term questions like "How long will the conflict last?" and "How high will oil prices go?", this article attempts to pull the perspective back to a longer time scale. Bridgewater Associates founder Ray Dalio believes that the current series of regional conflicts are piecing together into an as-yet unnamed "world-class conflict", whose evolutionary logic is closer to the cyclical stage on the eve of major historical wars.
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QAccording to Ray Dalio, what is the most important perspective to understand the current global situation?
AThe most important perspective is that we are in the early stages of a world war that will not end soon, and it is part of a larger 'Big Cycle' of structural changes in global order, rather than just focusing on short-term events.
QWhat does Dalio identify as the key factor in determining which side wins a prolonged conflict, rather than absolute strength?
AThe key factor is which side can endure pain and sustain the conflict better, as victory comes not from weakening the enemy but from making them surrender, and the ability to承受痛苦 (endure suffering) is crucial.
QHow does Dalio describe the current shift in the world order?
AThe world order is shifting from one dominated by the US and its allies with rules-based multilateralism to a state with no single dominant power, where 'might makes right' prevails, resembling pre-1945 historical periods more than the post-war order.
QWhat are some of the indicators or signals that Dalio uses to track the progression into a conflict phase?
AIndicators include the depletion of military and resource stockpiles, rising fiscal spending, debt, money printing, and capital controls, rival nations learning from each other's strengths and weaknesses through conflicts, and overextended dominant powers facing multiple distant conflicts simultaneously.
QWhy does Dalio suggest that China might be less vulnerable in the context of a potential closure of the Strait of Hormuz?
ABecause China has a supportive relationship with Iran, likely ensuring oil passage to China; strong ties with Russia for alternative oil supplies; significant other energy sources like coal and solar; large oil reserves (90-120 days); and consumes 80-90% of Iran's oil output, strengthening its leverage.
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