"It all comes down to who controls the Strait of Hormuz. If Iran retains the ability to control, or even negotiate over, who passes through the Strait—through which roughly a fifth of the world's oil supply flows daily—the U.S. will be seen as having lost the war, regardless of how the conflict is resolved."
"When that dominant power, the holder of the world's reserve currency, is overextended financially and then reveals its weakness by losing control over the conflict, watch out for allies and creditors losing confidence, the loss of its reserve currency status, the selling of its debt assets, and the weakening of its currency, especially relative to gold."
"A pattern has repeated across 500 years of history: a rising power challenges the dominant empire over a critical trade route while the world watches, and money and alliances shift fast toward whoever wins."
Ray Dalio warns that the U.S.-Iran conflict over the Strait of Hormuz represents a decisive confrontation determining global order survival. Through which roughly one-fifth of world oil flows daily, control of this waterway signals superpower dominance. Dalio compares potential U.S. failure to Britain's 1956 Suez Canal Crisis, marking imperial decline. Historical patterns show rising powers challenge dominant empires over critical trade routes, with money and alliances shifting toward victors. When financially overextended dominant powers reveal weakness, consequences include ally and creditor confidence loss, reserve currency status erosion, debt asset selling, and currency weakening relative to gold.
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