Major investor Ray Dalio is making statements that resemble tracer rounds for the future. Regardless of how fascinating some may find him, it is clear that he understands we are in the final stage of the so called Fourth Turning, and of the major social, economic, and monetary transformations already underway. Within this specific theoretical framework, the Fourth Turning is the fourth and final phase of a historical cycle of approximately 80-100 years, corresponding to a period of prosperity, crisis, upheaval, and institutional rebuilding.
The four phases are often described as:
1) High → Period of prosperity
2) Awakening → Spiritual or social awakening
3) Unraveling → Disintegration or dissolution
4) Fourth Turning → Period of crisis or great inflection point
The transition from Democracy to an authoritarian regime
We are living through the final, decisive years of a global order that has existed for approximately 85 years, a monetary architecture shaped in 1944 through Bretton Woods, which now appears to be disintegrating, leading toward a multipolar system with uncertain foundations.
In a recent discussion with Tucker Carlson, Dalio described what he considers an “inevitable” transition from Democracy to an authoritarian regime. He invoked Plato and the cycle of political systems, a theme shared with Aristotle, who also wrote about the decay of constitutional forms, as described in Plato’s seminal political work, The Republic. Democracies, according to this reasoning, are eroded by wealth inequalities, social tensions, and the delegitimization of institutions.
When citizens cease to believe the system is fair, when they view the judiciary, elections, or institutions as “rigged”, then the entire order of things comes under question. Any resemblance to the contemporary Greek situation is hardly accidental.
Carlson framed it bluntly: polarization leads to deadlock, deadlock leads to paralysis, and paralysis, “by necessity”, leads to authoritarian solutions. Dalio added that when people identify completely with “tribes”, political or cultural, and when common ground disappears, the system is compelled to undergo broad transformation.
At that point, every citizen has three choices:
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Choose a side and fight
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Bow their head and hope not to become a target
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Leave
The Carlson–Dalio conversation
The above captures with striking accuracy today’s American, and not only American, reality. Polarization deepens, the legal order is instrumentalized by all sides, and de-escalation of political hostility appears unlikely before further tension and the emergence of a quasi civil conflict environment.
As 2026 unfolds, the political temperature in the United States appears to be rising dangerously, culminating in the November midterm elections.
The conclusion that can be drawn from these observations is that if Donald Trump wishes to prevail on the geopolitical chessboard against Xi Jinping and Vladimir Putin, he must overcome a significant structural disadvantage.
These leaders operate on the long time horizon. Putin, for example, was preparing from 2014 onward for the special military operation in Ukraine, as we now understand. They have secured domestic alliances and institutional continuity that extend beyond the short electoral cycles to which Donald Trump is bound.
To achieve the comprehensive economic transformation he is attempting through tariffs, dollar devaluation, reduction of the massive United States twin deficits, and the reshaping of the geopolitical paradigm, he must free himself from electoral constraints.
This would require suspending the midterm elections, citing extraordinary economic and geopolitical conditions.
This is easy to say and extremely difficult to implement, of course. Yet a “lame duck” president for the next two years, without control of Congress, with a strengthened Washington deep state, would be unable to pursue any major reform and would become a weakened interlocutor abroad.
Failure would be almost certain, especially if economic changes, such as tariff revenues, fail to materialize sufficiently by the end of 2026, or if other cyclical pressures arise, including spikes in unemployment or inflation.
Monetary transformation and the reign of gold
In the continuation of the discussion, Dalio outlined his six stage cycle, arguing that we are currently in Stage Five. Stage Six, as he describes it, represents the breakdown of the monetary and social order.
The rise in the price of gold is viewed, within this framework, as a symptom of increasing risk of transition into that final stage. As he noted: “Gold is the one asset that is not someone else’s liability.”
That is, it is not debt, not a third party promise, but a final asset.
Here it is worth returning to Neil Howe’s book, The Fourth Turning. According to this framework, in the final years of the Fourth Turning, societies enter a period of escalating pressure.
Institutions lose legitimacy faster than they can be reformed. The political system becomes polarized, financial structures strain, and trust in the establishment collapses.
What begins as diffuse anxiety culminates in decisive confrontation, often triggered by a catalyst: war, economic collapse, or systemic failure.
Compromise becomes rare. History accelerates.
The defining feature is not chaos, but forced choice: what deserves to be preserved, what must be dismantled, and which new rules will govern collective life.
Real assets and productive capacity
Who benefits during this phase?
Not those tied to the existing, debt saturated and financially inflated order. Financial engineering elites, bureaucratic mechanisms, and systems dependent on excessive leverage typically lose power and credibility.
Instead, those linked to real assets, productive capacity, energy, food, metals, defense, and practical adaptability in unstable environments tend to gain.
Socially and psychologically, time compresses. Moral clarity replaces ambiguity. Sacrifice becomes socially acceptable. Extreme individualism yields to collective action.
Freedoms may be temporarily constrained, yet large scale projects previously considered impossible become achievable.
At the end of the crisis, according to the Strauss–Howe framework, what emerges is not mere collapse, but reconfiguration.
A new political and economic order arises.
Institutions are rebuilt, or replaced, upon principles forged in crisis. The new system tends to be more disciplined, more production oriented, and less dependent on financial illusions.
In other words, the Fourth Turning does not end in chaos, but in restart.
A hard reset that clears the ground for a new growth cycle.
And if history repeats itself even partially, then hard assets, particularly gold, are not merely investment choices, but foundations of the next era.
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