In an interview with CNBC in September, Bridgewater Associates founder Ray Dalio discussed his new book, “A Template for Understanding Big Debt Crises,” in which he shares lessons learned from history’s financial downturns.

Dalio’s book describes the six stages that lead to debt crises. Of these, he says, the most important is the “bubble stage” in which asset prices are rising and people are borrowing excessively. “Central banks don’t pay much attention to the bubble stage,” he argues, “because it’s not affecting inflation or growth.”

We are now in the “seventh inning” of the cycle, says Dalio, and hat although debt levels have increased since the 2008 financial crisis, debt service payments relative to incomes have not reached the levels they were in 2007. He notes that we are now in the “tightening” phase in which “we have to think about what the next downturn will be like.” He believes it will be earmarked by pension and healthcare issues and will be “slower growing, more constricting, with more social and international implications.”

Debt crises, says Dalio, are inevitable because there is “never a perfect balance between lending and borrowing.”