In a recent opinion article Ray Dalio sees the chance of “some sort of civil war” which could be also non violent and involve people being forced to take sides, keep their heads down or move to other states within the U.S as above 50%.
He says he is confident that we will know if the brink will be crossed within next year.
In the article he linked parts of his book on changing world orders in which he describes how an increasing wealth gap leads to the raise of populist leaders and increasing popularization/extreme positions which leads to both sides engaging in existential fights at all costs with a tendency to ignore all norms, truth & the rule of law.
Once one side is successful the internal order of a country can be radically changed.
The strongest historical leading indicator for an civil war is when the government runs out of money and fails to fulfill its functions or need to cut costs and raise taxes (the U.S. can choose the easier way of printing money as of now)
He also says that internal and external conflicts often happen at the same time or in close succession as external powers want to take advantage of the chaos of an internal conflict or people who won an internal conflict want to unite the country with an external conflict.
As of October 2023 shortly after the start of the Israel-Hamas war he saw the chances of a larger world war involving major powers US and China at 50%. He did not specify a timeframe for this to happen.
Asseessment
I am still undecided if I think those cycles repeat always over time or if we live in a time with unprecedented technological progress, interconnection of countries, wealth and overall sophistication and ability to handle those situations that makes it less likely that a civil war or world war would occur.
That said I think current observable trends are undeniably moving in the direction that Dalio describes and his theories cannot be discounted and have to be taken as serious possibilities or threads.
Thinking about an asset class which helps to protect against changing world orders I would say crypto might be very powerful due to its decentralized and autonomous nature.(as long as it is not banned by major countries)