Why Ray Dalio’s Stage 6 Is Now Official Policy ?

The world order established in 1945 didn’t just fade away; it was formally pronounced dead between February 13 and 15, 2026. At the 62nd Munich Security Conference (MSC), a room filled with nearly 50 heads of state listened as the consensus was delivered: the rules-based international framework is no longer functional.

The conference’s primary document, titled "Under Destruction," characterized the current era as one of "wrecking-ball politics". For macro-investor Ray Dalio, this wasn't an anomaly. It was the empirical validation of his "Big Cycle" theory—specifically the transition into Stage 6: the final, disorderly phase of an empire where might is right and the "law of the jungle" returns .

The Mechanical "Why": Decoding Stage 6

Dalio’s framework posits that empires rise and fall in predictable cycles of 75 to 150 years. By 2026, the United States has reached the late-stage symptoms of decay: internal wealth gaps where the top 1% hold 32% of assets, polarization that threatens the rule of law, and a $37 trillion debt pile requiring $1 trillion in annual interest payments .

When internal order rots, external order follows. Dalio argues that international relations are driven by raw power because no global "police force" exists that is stronger than the most powerful nations. In Stage 6, individual countries determine how things go rather than the United Nations.

The Five Dimensions of Conflict (2026 Evidence)

In Stage 6, conflict is no longer a peripheral issue. It is a multi-dimensional leverage game. In 2026, we see all five of Dalio’s war types active simultaneously:

1. Trade Wars: The US has imposed non-WTO-compliant tariffs on nearly every major partner. Dalio predicts 60% tariffs on Chinese imports will lead to a 1–2% GDP drag by 2026 as firms reshore at massive expense .

2. Technology Wars: Advanced AI and semiconductors are now "protected national security assets" . The AI arms race is the 2026 "Sputnik moment," with control over advanced compute stacks becoming a privileged asset .

3. Capital Wars: On December 27, 2025, China froze the assets of 20 US defense firms (including Anduril and Northrop Grumman) in response to a $10 billion Taiwan arms sale . US Treasury Secretary Scott Bessent has countered that "everything is on the table," including delisting all Chinese stocks from Wall Street .

4. Geopolitical Wars: Territorial conflicts are being resolved through "diplomatic extremes" . The Greenland Crisis of early 2026, where the US used tariff threats to pressure Denmark, illustrates a world where sovereignty is negotiable for the powerful .

5. Military Wars: The US strike on Venezuela in January 2026 to capture Nicolás Maduro signaled the end of the post-Cold War era . Carried out in open violation of international law, the operation normalized the use of "coercive power over rules" .

The "Golden Dome" and the Cost of Survival

To secure this "New Golden Age," the 2026 National Defense Strategy (NDS) has prioritized the "Golden Dome for America"—a multi-layered missile shield .

The system utilizes a constellation of thousands of low-Earth orbit satellites equipped with infrared sensors to destroy threats in their "boost phase" . However, the fiscal cost is a flashpoint. While the White House claims a cost of $175 billion, the Congressional Budget Office (CBO) estimates it at $831 billion, with some independent analysts suggesting a total of $3.6 trillion through 2055 due to satellite replacement cycles .

The Hague Commitment: Burden-Shifting for NATO

A cornerstone of the 2025 National Security Strategy is the "Hague Commitment". This is not just burden-sharing; it is a mandate. Allies must now spend 5% of their GDP on defense—3.5% on core military requirements and 1.5% on security resilience (infrastructure and innovation) .

For many G7 nations, this is an economic impossibility. In Albania, public investment only hit 5.3% of GDP total in 2024; a 5% defense spend would require a total gutting of social services . Yet, US Secretary of State Marco Rubio has been blunt: the days of the US "propping up the entire world order" are over.

The Munich Security Index: A Deepening Divide

Public opinion in 2026 confirms this structural split. Publics in the G7 and BICS (BRICS minus Russia) countries have fundamentally different risk perceptions .

The Real System Issue Underneath

Why is this happening? Dalio points to the "guns and butter" trilemma. To maintain an empire, a country must fund both its military and its social needs without destroying its currency.

The US is currently in a "debt death spiral" . Foreign inflows into US assets have plummeted 40% since 2021 as investors lose confidence in US fiscal management. As yields spike to attract buyers, debt-servicing costs balloon further, scaring away more investors. Is this a renovation of the old order, or an eviction notice for the middle class?

FAQ

1. What is Stage 6?

The "War and Revolution" phase of the Big Cycle, characterized by the absence of enforceable rules and a return to "might is right" politics .

2. What is the "Under Destruction" report? The 2026 Munich Security Report that declares the US-led post-1945 international order is being dismantled by the very country that built it.

3. What is the Hague Commitment?

A 2025 US mandate requiring NATO allies to spend 5% of their GDP on defense and security infrastructure .

4. What happened in Venezuela in 2026?

A US military strike captured President Nicolás Maduro, an act the MSC report describes as the normalization of "coercive power over rules" .

5. How much will the Golden Dome cost?

Estimates range from the White House's $175 billion to the CBO's $831 billion, with the project requiring satellite replacements every 7 years .

6. Is US-China trade ending?

Bilateral trade is expected to decline by over 50% through 2030 as both countries "home-shore" everything with national security implications .

The Verdict: A World of Transaction

We are no longer in an era of principled cooperation. We are in an era of "naked strategic transactionalism" . Whether it is the U.S. using tariffs to "buy" Greenland or China weaponizing rare earth minerals, the message is the same: rules are for those who lack the power to break them .

Dalio’s final principle is a warning for the survivors of Stage 6: "Have power, respect power, and use power wisely". In 2026, a treaty is only worth the missile defense system that enforces it.