Recently, leaders of major powers have begun to speak in unprecedented agreement that the "world order" that we have adhered to since 1945 has ended. At global forums such as the World Economic Forum 2026 and the Munich Security Conference, European and U.S. leaders have clearly stated that the world is entering a new era filled with great power competition.
German Chancellor Friedrich Merz stated, "The world order that lasted for decades no longer exists." French President Emmanuel Macron warned, "Europe must prepare for war because the old security structure is no longer effective." Meanwhile, U.S. Secretary of State Marco Rubio confirmed, "The old world is gone," and we are entering a new era of geopolitics.
But these voices are not only from politicians; recently, Ray Dalio, the billionaire investor and founder of Bridgewater Associates, one of the world's largest hedge funds, has confirmed the same direction: the post-World War II world order has definitely collapsed.
From Dalio's perspective, the world is entering the final phase of the power cycle (Big Cycle): the "sixth phase" or the "era of disorder." This phase involves clashes between great powers and competition to establish new global rules. This framework is drawn from his famous book"Principles for Dealing with the Changing World Order,"where he explains international relations and the mechanisms of world order by dividing the global cycle into six phases.
When political and financial leaders agree on this point, the key question is no longer whether the world is changing but how much this transition will disrupt the global economy and financial system going forward.
"The Big Cycle of External Order and Disorder," Dalio explains that the world is now entering phase six, a time of chaos because international rules cannot be effectively enforced. International organizations are powerless, and great powers confront each other directly. Organizations like the UN will fail due to lack of authority and funding beyond that of major countries. When interests conflict, the most powerful countries set the rules.
Dalio says global dynamics are driven more by the "Law of the Jungle" than international law. Even though there are organizations above states, if major powers like the U.S. or China dominate, these organizations cannot truly direct world affairs. On the international stage, there is no police or courts to enforce or punish; ultimately, the more powerful dictate the rules.
These rules involve using power to pressure opponents through five interconnected forms of war:
Dalio cites the case study of the 1930s and World War II period, when the global economic depression caused nearly every country to face internal problems, pushing populist dictatorships to power, such as the Nazis in Germany. Hitler pursued nationalist policies, canceled foreign debt payments, and printed large amounts of money to build the military. Although risky, the economy initially recovered with full employment and soaring stock markets.
Similarly, Japan’s militarist regime faced comparable conditions. Exports dropped nearly 50% between 1929 and 1931. The country went bankrupt, abandoned the gold standard, faced severe currency devaluation, political turmoil, rising nationalism and militarism, and began invading neighbors and expanding power in China and Asia to seize resources.
Meanwhile, after 1929, U.S. banks suffered heavy bad debts and reduced global lending. The economy entered a contraction cycle, leading to protectionist trade policies like the 1930 Smoot-Hawley Tariff Act, which worsened the global economy. Raising tariffs during economic downturns is common but reduces overall efficiency and triggers trade wars.
Soon after, the U.S. enacted the Lend-Lease Act to supply arms to Britain, the Soviet Union, and China, while sanctioning Japan, especially by cutting oil exports that accounted for 80% of Japan’s oil consumption. Japan faced a dangerous choice: expand territory for resources or confront the U.S., leading to the 1941 Pearl Harbor attack and the full outbreak of World War II.
Dalio’s examples illustrate the convergence of three major cycles: credit and monetary cycles, domestic disorder, and international disorder. External turmoil forced countries to adopt strict economic and political policies to preserve national interests and survival. Moreover, these situations led to mutual distrust (Prisoner’s Dilemma).
These factors triggered world war and laid the foundation for a new world order, similar to today's situation, especially concerning the U.S. and China, which are engaged in an economic war that could escalate into military conflict.
If the world is entering Dalio’s sixth phase of the Big Cycle, we should ask what the future financial landscape might look like. We can outline five possible scenarios:
In phase six, the boundary between economics and military will blur, making finance the first battleground before actual warfare (Shooting War).
The world will shift from an era focused on maximum efficiency to one prioritizing maximum security, which is much costlier. Military spending, relocating production bases, and protecting industries will raise national costs long-term.
As trust in the global financial system fades, the once unified financial world (globalization) will fragment into blocs: Western financial systems, Chinese financial systems, and other trading groups. The dollar system may face greater challenges.
Historical lessons show stock markets will not move solely on economic fundamentals but on a nation's likelihood of winning or losing in various conflicts.
In an era of risky paper money, tangible assets essential for state survival will hold the highest value.
In short, as the U.S.-centered old world order declines, the financial world will never be the same. Systems once reliant on the dollar, free trade without barriers, and tightly linked global supply chains are being replaced by a divided, multipolar world.
Finance will be weaponized more frequently. Sanctions, payment system shutdowns, and asset freezes will become standard tools of great powers. Simultaneously, capital will move more cautiously, nations will stockpile gold, diversify reserves, and try to reduce reliance on a single currency.
We may see a multipolar financial system: the dollar remains important but not dominant, China pushes the yuan, developing countries may create alternative payment mechanisms, and governments will prioritize strategic security amid volatile inflation and turbulent capital markets. Countries must navigate this transition carefully.
Dalio concludes that survival will favor not the richest countries but the most resilient, those maintaining domestic production capacity and public trust in their systems. If great powers continue destructive competition, the financial system will fracture permanently, and geopolitical risks will persist. However, if they choose negotiation and mutual benefit, a new cycle may emerge without large-scale wars.
Follow the Facebook page: Thairath Money at this link -