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What are the world's biggest investors actually saying right now? And what can we learn from the legends who came before them?
Every episode, we go source-by-source through interviews, reports, and predictions from investors like Cathie Wood, Ray Dalio, and Stanley Druckenmiller—plus deep dives into the timeless lessons from trading legends like Jesse Livermore and Paul Tudor Jones.
No speculation. Just verified quotes, specific predictions, and the strategies behind the world's greatest money minds.
This is Money Men.
So there's an investor who manages over a hundred billion dollars, a guy who built the world's
largest hedge fund from scratch, who's predicted major economic shifts before almost anybody else
saw them coming. And just days ago, he sat down with Tucker Carlson and delivered what might be
one of the most chilling warnings about money that I've ever heard. He said, quote,
there will be no privacy. And by the way, he wasn't just talking about social media.
He wasn't talking about government surveillance. And he was talking essentially about your money,
your bank account, every single transaction that you make. The investor I'm talking about,
of course, is Ray Dalio. And he just explained why central bank digital currencies, or CBDCs,
are coming, whether we like it or not, and why the government will be able to see everything
that we buy, why they could freeze your accounts with the click of one single button, and why he
thinks America is heading towards what he calls a financial heart attack. Oh, and by the way,
he also mentioned civil war, not as some distant possibility, as something he sees
real signs of today. And so today, I'm going to break down everything that Dalio said, what CBDCs
actually are, and why they terrify people, and why he thinks the United States is in stage
five of collapse, and also what he says you should do to protect yourself. And so this is
essentially going to be a longer episode because there's a lot to unpack here, but trust me,
you're going to want to hear all of it. Just a quick disclaimer before I dive in,
nothing in this episode is financial advice. I'm not a financial advisor or expert. I'm just a
regular guy learning about markets and sharing what I find interesting. Always do your own
research. All right, let's dive in. So if you don't know who Ray Dalio actually is,
here's a quick version. He started Bridgewater Associates in 1975, not with millions in startup
capital out of his two-bedroom apartment. And so today, it's actually the largest hedge fund
in the world with over $100 billion under management. Forbes puts his net worth around
$15 billion. But here's what makes Dalio different from other billionaires who talk about the economy.
First of all, he's not a permable, or a perma bear, by the way. He's made money up in markets
and also down in markets as well. He's made big calls that were right, and he's publicly admitted
when he was wrong. That's the kind of intellectual honesty that's rare on Wall Street. Second,
he's obsessed with understanding how what he calls the machine works. Not just markets,
but economies, societies, and civilizations. He spent decades building models and studying history
to understand why countries rise and fall. He actually wrote a book called Principles for
Dealing with the Changing World Order, where he analyzed 500 years of history. He actually
looked at the Dutch Empire, the British Empire, the rise of America, the rise of China,
every currency collapse, every revolution, and civil war. And he's built a framework for
understanding where we are in this cycle. By the way, I did two episodes on Dalio on his first book,
which is called Principles of Life and Work. If you want to check those out as well,
they're earlier on in this podcast. Third, he's known for something called
radical transparency. So at Bridgewater, every meeting is actually recorded. So employees,
at the end, what they do is they rate each other constantly. They disagree with each other. It's
actually encouraged. It's like a social experiment cross with a hedge fund. And the point is Dalio
believes in looking at reality as it actually is, not as we wish it were. And so that framework he
built is what he calls the big cycle. And according to Dalio, America is deep into the danger zone
right now. So when this guy sits down and says he's worried, you should probably pay attention
because he's not trying to sell you anything. He's not running for office. He's just sharing what he
sees when he looks at the data. So before I get into the specific awareness, I think it's actually
really important to explain Dalio's framework because once you understand how he thinks,
everything else is going to make a lot more sense. So in the Tucker Carlson interview,
Dalio explained that there are five major forces that drive the rise and fall of civilization. So
here's how he put it. Force number one is the monetary order. And I quote, how does the economy
work? You put in money, creates credit. People with credit do things with that. They borrow.
If they can earn enough money to pay back, the system works well. But here's the key insight. He
said, when debt service payments rise relative to incomes, it squeezes out other spending the
way it would do for you as an individual and try to think about that on a personal level.
So if you're spending 50% of your income on debt payments, you don't have money for anything else.
Now imagine that happening to an entire country. So force number two is the domestic political
order. And Dalio explained this. He said, when you get large wealth and value differences,
and there's a sense that the system isn't working for them, and there's a greater polarity,
that's the emergence of populism. And he compared it to the 1930s. And I quote, like in the 30s,
four democracies chose to be autocracies because the polarity was so great and the willingness to
go along with the democracy system ceased to exist. That's actually a really chilling historical
parallel. You have Germany, Italy, Spain, Japan, all were democracies that became autocracies
when the polarization got too extreme. Then we have force number three, which is the geopolitical
order and how countries relate to each other, essentially. So after World War II, we created
a multilateral system, which was the United Nations. Also, we had the World Trade Organization
and the World Bank. This was essentially a rules-based international order. But Dalio points
out, he says this, if the system as a whole is not consistent with the interests of those who are
the most powerful, power rules. In other words, when the dominant power no longer benefits from
the rules, the rules break down. That probably kind of sounds familiar, right? And then we have
force number four, which is acts of nature. And I quote, droughts, floods, and pandemics have
killed more people than wars. So you can't ignore it as a big influence. And we just lived through
a pandemic. So we're seeing climate events. These aren't separate from economic and political
cycles. They actually interact with them. And then we have force number five, which is technology.
And I quote, he says this, whoever wins the tech wars wins also the economic and geopolitical war.
And right now that means AI. Everything's about AI right now. Whoever leads in artificial
intelligence will have an enormous advantage in everything else moving forward as well.
So then these five forces, they're all in motion right now. And according to Dalio,
they're all pointing in a pretty concerning direction. Okay. So now we understand the
five forces. Let's get into the meat of this discussion right now, which is central bank,
digital currencies, or CBDCs. So if you haven't heard of CBDCs, here's a simple explanation real
quick. It's a digital version of your country's currency that's issued and controlled directly
by the central bank, not by commercial banks, not by Visa or MasterCard, by the government itself.
Remember that. Okay. And right now, when you have money in your bank account, it's actually
just an entry in your bank's ledger. The bank is an intermediary between you and the federal
reserve. If the bank fails, you might lose your money. That's why we have FDRC insurance. That's
why it exists. So with a CBDC, there's actually no intermediary. Your money exists directly on
a government controlled system. Okay. That's where it is. It's like having an account at the federal
reserve itself. Now, proponents say this actually has some benefits. So we're talking things like
faster payments or lower transaction costs or financial inclusion for people without bank
accounts. And also we have potentially no more bank runs in the future as well. But critics
also, including Dalio as well, they see something much darker as well. So here's what Dalio told
Tucker Carlson, and I quote, I think it will be done. That's literally what he said. He said,
I think it's going to be done. He's saying that CBDCs are actually inevitable,
not just in countries that value freedom and privacy. And Tucker actually asked him about
the privacy implications and Dalio didn't sugarcoat it. He's exact words with this, right?
He said, there will be no privacy, and it's a very effective controlling mechanism by the
government. Try to let that sink in. It's very difficult to do, but try to let it sink in.
There's going to be no privacy and effective controlling mechanism. This isn't some conspiracy
theory saying this. This is the founder of the world's largest hedge fund. So let me just try
and paint a picture of what a CBDC future might look like, because it's important to understand
the mechanics and not just the abstract concerns, all right? So with CBDCs, the government would
have a real-time ledger of every transaction in the economy, every single coffee you buy,
every donation you make, every payment to anyone for anything you've ever done, right?
Try to think about what you've spent money on in the last month. Now imagine the government
having a complete record of all of it, not just your bank seeing it, the government,
but it goes actually beyond surveillance. There's this thing called programmable money and Dalio
explained it like this. He said, they can take your money directly, no court order needed,
no warrant, no due process. If the government decides you owe taxes, they could automatically
deduct it before you even see the money. Try to imagine a world where your paycheck hits your
account and 30% is instantly removed for taxes, not at the end of the year, in real time. And
here's where it gets really dystopian. When Tucker brought up the idea of being politically disfavored,
Dalio said, you could be shut off. I'll say it again, shut off from the entire financial system.
No bank account, no way to buy food, no way to pay rent, no way to buy a plane ticket,
all with the click of a single button. And try to think about what that means. Right now,
if the government wants to freeze your assets, they have to go through a legal process.
They have to get a court order. There's actually checks and balances to this entire process, right?
With a CBDC, they could do it instantly before you even know what's happening, before you have
a chance to move your money or hire a lawyer. Dalio also pointed out that CBDCs probably won't
pay interest. So quote, he says this, you'll have the depreciation of the dollar. Your money
just sits there losing value to inflation while the government watches everything you do with it.
And then, by the way, there's the foreign dimension as well. Dalio noted that for
international holders, CBDCs create special risks. If you're a citizen of a country that
falls out of favor with the issue in government, your CBDC holdings could be frozen or seized.
We've already seen this with sanctions on Russia and Iran as well. Now, imagine that capability
built directly into the currency itself. Now, you might be thinking, that sounds kind of like
dystopian fiction. And that would never happen in America, right? And so right now, you're partially
correct. Yes, you are. Trump signed an executive order on January 2025, explicitly banning the
creation of a US CBDC. Treasury Secretary Scott Besant confirmed that there are no efforts underway
and there's strong political resistance from both libertarians on the right and civil liberties
advocates on the left as well. But Dalio's point is more subtle than America will adopt CBDCs
tomorrow. His point is that globally, CBDCs are coming. China is already rolling out the digital
yuan. The European Central Bank is working on a digital euro as well as we speak. Nigeria, Jamaica,
the Bahamas have already launched CBDCs. 49 other countries are actively testing them right now. The
momentum is there. So once other major economies adopt CBDCs, the pressure on the US will be
enormous. So for international trade, for financial system, interoperability, for maintaining the
dollar's reserve currency status as well, we have to keep all of that in mind. Now, here's the deeper
point that Dalio is making. So CBDCs might become necessary because of the debt crisis. When a
government is desperate enough, it reaches for whatever tools it can find. And a CBDC gives
governments unprecedented tools for managing debt, controlling capital flows, and implementing
monetary policy. The technology exists right now. Now, let's talk about why Dalio thinks CBDCs might
become necessary because it ties into something even bigger, which is the US national debt right
now is over $38 trillion. Let me just try to put that into perspective for anyone who doesn't know
how much money that actually is. If you stacked $38 trillion one dollar bills on top of each other,
the stack would reach to the moon and back multiple times. That's how much money we have
in debt right now. If you made a million dollars a year and saved every penny, it would take you
38 million years to pay that off, okay? We add about a trillion dollars to the debt every 100
days. That's faster than any point in American history, including during World War II. Dalio
says we're approaching what he calls a systemic breaking point. And here's how the system works,
we have the US government funds itself by selling bonds, treasury bonds. Investors around the world
buy those bonds because they trust the US will pay them back. China holds over a trillion dollars
in US treasuries. Japan holds even more as well. But here's the problem. Dalio identified, and I'm
going to quote him on this, he said, when you have a new monetary system, which the United States had,
and the dollar was the world's reserve currency, then you can sell a lot more of the debt. So
there's a supply and a demand. So right now, the US is selling more and more bonds just to cover
the spending. And at some point, Dalio warns, the demand might not keep up with the supply.
Try to think about it like a credit card is the easiest way to think about it. You can keep
borrowing as long as someone is willing to lend to you. But eventually, lenders start to wonder
if you can pay the back. Interest rates rise, new lenders start to dry up as well. So if that
happens to the US government, the Federal Reserve would have to step in and buy the bonds themselves.
That's called monetizing the debt. It's basically creating money out of thin air to pay the bills.
What's the result of all of this? What happens is the currency weakens, inflation goes up very
quickly. The purchasing power of every single dollar you own just ends up getting destroyed.
And Dalio calls this a potential financial heart attack. That's the words he used,
financial heart attack. It's not a slow decline. It's a sudden crisis, the kind of thing that
happens faster than anyone expects. And here's the historical pattern he points to. This is
exactly how empires have fallen throughout the history. We have the Dutch, the British, the
Spanish. They all had currencies that were the world's reserve currency until they didn't very
quickly. Okay, so here's where we're going to go to the dark side a little bit here with Dalio's
framework. In his book, Dalio describes a six-stage cycle that empires go through. So we have stage
one, which is the new order. Essentially, a currency emerges from conflict with a clean slate,
low debt, united people, clear leadership. Then we move on to stage two, which is early
prosperity, strong growth, rising living standards, and optimism. Then we go to stage three, which is
the peak. And the country is dominant at this point. Its currency is the world's reserve currency.
It sets the rules for all international trade as well. Then we go into stage four, which is
overextension. The debt builds up, wealth gap widens, the country starts to live beyond its
means. Then we move on to stage number five, which is the breakdown phase, bad financial conditions,
internal conflict, breakdown of trust in institutions, polarization becomes extreme.
And then we move into the sixth and final stage, which is civil war or revolution. The old order
is destroyed, a new order emerges, and the cycle begins again. So according to Dalio, the United
States right now is firmly in stage five. And he explained it to Tucker like this. There's a
monetary order breaking down, a domestic political order breaking down, and a geopolitical order
breaking down all at the same time. And I quote, when I'm no longer willing to accept that the
system, the rule of the system, because everyone thinks it's rigged. And he's talking about when
people lose faith in institutions, when they see that the Supreme Court is partisan rather than
impartial, when they see elections as rigged rather than legitimate, when they're no longer
willing to accept losing. And he said this in his ex post from January, he wrote, the United States
is now in a tinderbox, not might become a tinderbox, is in a tinderbox right now. He was
citing polling data showing that roughly 25% of Americans would be willing to fight violently
for their political beliefs. One in four people ready to use violence. Try to think about that.
So in an older interview, Dalio actually elaborated on this. And I quote, there are
irreconcilable differences that each side is willing to fight for in order to get the outcomes
that they want. In that environment, the issues of how the legal system works, whether it will
stand in the way of that fight come into play. And then Tucker actually asked him, how are they
going to be resolved? Like how can they actually become resolved? Dalio's answer was actually really
blunt about this. He said, clearly they're resolved through conflict because you get to the point
where both sides can't reach agreements. Both sides don't even want to talk. Both sides don't
want to respect the rule of law. And then he talked about what he calls the classic toxic mix.
And I quote, the single most reliable leading indicator of civil war or revolution is bankrupt
government finances combined with big wealth gaps. So do we have bankrupt finances? Check. Yes,
we definitely do. We have $38 trillion of debt. Do we have big wealth gaps? Yes, we do. Inequality
is actually at historic highs right now. Dalio also pointed out something that historians watch
for as well. And I quote, history shows that during periods of massive conflicts,
federalist democracies like the US typically clash over relative powers between states and central
government. And we're seeing that exactly right now, by the way, states defying federal authority
on immigration, for example, the federal government pushing back. We have sanctuary
cities as well, border disputes. That tension is a classic warning sign. But here's the thing.
Dalio isn't saying civil war is inevitable. He's described it as a fork in the road. And I quote,
stage five is a fork in the road. One path leads to civil war or revolution, the other to peaceful
and ideally prosperous coexistence. So what he's saying is that we essentially have a choice right
now. The question is whether we're going to make the right one. So moving on, one thing that makes
Dalio's analysis really compelling is that none of this is new. It all happened before. So we have
the Dutch Empire in the 1600s. They had the world's reserve currency at that point, which was the
guilder. They had the most advanced financial system. They had global trade dominoes, and then
debt accumulated. Political divisions deepened as well. The British rose to challenge them,
and the Dutch order collapsed very, very quickly. Then we had the British Empire, which was in the
1800s and the early 1900s, which was the pound, essentially was the world currency at that time.
Britain ruled the waves, right? They ruled the oceans. And then debt from the two world wars
accumulated. The US rose to challenge them, and the British order collapsed. In each case, the
pattern was really similar. We had debt, polarization, rising challenges, loss of monetary dominance,
and then internal conflicts. Dalio's point isn't that America is doomed. His point is that we're
following a pattern that was repeated throughout history. And if we don't recognize it, we can't
change course. And I quote, this isn't the first time this happened. This happens repeatedly
throughout history, and usually it runs its course. Okay. So I know that's like a lot of
doom and gloom, and I don't want it to be all about doom and gloom. The obvious question is,
what should you actually do about all of this information? And Dalio has been really consistent
on this for years. He recommends holding gold right now. And his argument is very simple. Gold is
the only form of money that is not someone else's liability. When you hold a dollar,
you're trusting the US government. When you hold a bond, you're trusting whoever issued it. When
you hold gold, you're trusting physics. It's been valuable for 5,000 years, and it will probably be
valuable for the next 5,000 as well. His recommendation is to hold between 5% and 15%
of your portfolio in gold. Not as a speculatory bet, not to get rich quick as well, but as
insurance against currency debasement, debt crisis, and systemic shocks. And by the way,
he's not alone in this view. Central banks around the world, they've been buying gold at record
rates. China, Russia, India, Turkey, they're all accumulating gold right now. Ask yourself,
what do they know that we don't? Dalio also talks about diversification more broadly.
The era of great diversification, as he calls it, not just in assets, but geographically as well.
Holding some of your wealth outside any single country's system is what he's recommending.
That doesn't mean moving to Switzerland. It means not having everything tied to one government,
one currency, one banking system. And just on a personal level,
Dalio emphasizes productivity and education. He pointed out a really startling statistic,
actually. He said 60% of Americans have below a sixth grade reading level,
which is insane if you think about it. His view is that in uncertain times,
your most valuable asset is your ability to create value, skills that can't be inflated away,
knowledge that gives you options, adaptability. And I quote,
through productivity, they become educated and they become productive.
Now, I always want to present both sides of this. So let's talk about why some people think
Dalio is actually being really pessimistic and maybe overly pessimistic right now. First of all,
the CBDC argument, let's talk about that. Trump banned them. The US political system has strong
antibodies against government overreach. Even if other countries adopt CBDCs, there's a real
possibility America never does. The surveillance concerns resonate across the political spectrum.
Second, the debt argument. So people have been predicting a US debt crisis for decades now.
Every few years, someone says, this time it's different and the collapse is coming. And yet,
the dollar remains the world's reserve currency. Treasury bonds are still seen as the safest
investment on earth. Japan has an even higher debt to GDP ratio, and they haven't collapsed
as well. We have to keep that in mind. And there's actually a theory called modern monetary theory
that argues sovereign countries with their own currency can't really go bankrupt. They can
always print more money. It's possible just to do that. Now, that might cause inflation,
but it's not the same as actually defaulting on your debt. Third, we have the civil war argument,
which is yes, political polarization is bad, and it's really bad right now. But polarization is not
the same as violence. Social media makes things seem much more extreme than they actually are.
Most Americans, despite what they tell pollsters, just want to live their lives, raise their kids,
go to work, all the simple things, right? The actual number of people who would take up arms
is probably much smaller than surveys suggest. And then finally, Dalio has been wrong before,
by the way. He's been cautious about markets at times when they've continued to rise. He's made
calls that didn't actually pan out. His track record is really good, but it's not perfect.
So yes, take his warning seriously, for sure. Definitely do that. But don't panic. Prepare,
don't panic, okay? That's the right approach, and that's the approach that I'm going to be taking.
So what could all of this mean for us as investors? After going through all of it,
here's what I've been really thinking about. Here's what I've been paying attention to.
First of all, I'm paying a lot more attention to CBDCs after this discussion, for sure. I
kind of thought that argument was going away, but it seems to be here and present right now.
Even if the US doesn't adopt one, understanding how they work actually helps me understand the
future of money globally as well. Because it might not happen in America, it might happen
in other countries. I'm following what's happening in China, Europe, and other major economies as
well. This technology is coming, right? And it is going to affect global trade and finance,
even if America opts out. Second, I'm thinking about debt exposure. If Dalio is right about a
potential financial crisis, being over-leveraged seems really risky right now. Paying down high
interest debt, building cash reserves, having an emergency fund, these are the things that
just make sense to me regardless of whether the doom scenario actually plays out. And then third,
we have gold, right? So Dalio recommends 5% to 15% of your portfolio. I'm not saying that's
the right number for everyone, but I do get the logic. It is insurance. Physical gold,
gold ETFs, gold mining stocks, there are multiple ways to get exposure if that resonates with you.
We've already seen the rise of gold as well. It's going through the roof right now. Fourth,
diversification more broadly. Not having all your eggs in one basket, one country as well,
one currency, one asset class, that just seems like common sense hedging. And then fifth,
investing in yourself. So whatever happens in the economy, your skills, your knowledge,
your ability to adapt, that's something no government can take away from you. That's
probably the safest investment of all. And right now, I'm paying a lot of attention towards AI and
how I can actually become more knowledgeable in that area too. And I recommend that every single
human should be doing this as well. And finally, staying informed without obsessing. The world
isn't ending tomorrow, right? So don't panic. These cycles play out over years and decades,
not days and weeks. The goal isn't to panic, it's to be aware and think through
all these different scenarios. Ray Dalio has been studying cycles of history for decades. Yes,
he has. He's seen empires rise and fall, currencies come and go, political systems break
down and rebuild. And his warning is not that the collapse is inevitable. His warning is that we're
at a really critical juncture right now. The choices we make now as a country, as individuals,
will determine which path we take. CBDCs might come, they definitely might, but they also might
not. The debt crisis might hit, it might not. Civil conflict might escalate or we might pull
back from the brink. The one thing Dalio is certain about though, is uncertainty itself.
And in uncertain times, the people who prepare are the ones who survive. In his own words,
stage five is a fork in the road. One path leads to civil war or revolution, the other to peaceful
and ideally prosperous coexistence. Try to remember that, okay? Which path are we going to take? And
that's the question that Ray Dalio is really asking here. And it's the question that we should
all be asking ourselves as well. So here's my question for you. Are you prepared or are you
hoping everything just works out? Thanks for listening. If this episode made you think,
share it with someone who actually needs to hear it and I'll see you tomorrow.