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Dalio maintains that the “Great Cycle” is not only economic, it is also political and social.
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The devaluation of fiat money will be a constant from which it is necessary to protect oneself.
Ray Dalio, founder of Bridgewater Associates, maintains that the behavior of markets in 2026 will be determined by five key forces that are part of his concept of the “Great Cycle.”
According to the investor, this cycle encompasses economic, political and social variables. In this framework, identify five central forces: debt and money; internal politics; geopolitics; nature; and technology.
For Dalio, these forces will be decisive for the evolution of markets and the distribution of wealth in 2026.
«What happens with the currency matters a lot for changes in wealth and for what happens economically. When the currency itself depreciates, it reduces wealth and purchasing power, making one’s own goods and services cheaper in other currencies and the goods and services of others more expensive in one’s own currency,» he explains.
In that sense, he highlights: «In these ways, it affects inflation rates and who buys what from whom, although it does so with a certain delay. Whether one is hedged against the currency or not, is very important.»
The «Great Cycle» and social and political factors
In addition to debt and money, Dalio points out that domestic politics plays a key role: “The economy, markets and politics are interconnected and mutually reinforcing in the cycle.” That is to say, The “Great Cycle” that Dalio speaks of is not driven only by economic factors
Regarding geopolitics and the world order, he warns of a structural change: “In 2025 there was a clear change from multilateralism to unilateralism (in which power rules and countries act in their own interest).”
And he adds: “This increased and will continue to increase the threats of conflict and will cause an increase in military spending and debt to finance it in most countries.”
Regarding acts of nature, Dalio notes: “The progression of climate change continued, while there was a politically led shift by Donald Trump in spending money and encouraging energy production in an attempt to minimize the problem.”
Finally, on technology, he highlights the impact of artificial intelligence: “Regarding technology, obviously the artificial intelligence (AI) boom, which is now in the early stages of a bubble, had a big effect on everything.”
In this scenario marked by political tensions, debt expansion and structural transformations, bitcoin (BTC) appears to many investors as a safe haven asset in the face of monetary depreciation and the loss of purchasing power, as explained by NoticiasVE.