American billionaire and investor Ray Dalio has expressed concerns about the ongoing Iran conflict, stating that the most critical phase is yet to unfold. Dalio emphasized the significance of a decisive “final battle” for control of the Strait of Hormuz, which will not only impact the current war but also influence American power’s long-term credibility and the stability of the dollar-led financial system. He highlighted that both sides involved in the conflict are aware that the ultimate showdown, determining the victor and the vanquished, is still on the horizon.
Dalio firmly rejected the possibility of a negotiated settlement, labeling such agreements in this context as “worthless.” He predicted that the upcoming events are likely to represent the most challenging phase of the conflict. The billionaire framed the entire dispute around a straightforward test – whether the United States can ensure secure commercial passage through the Strait of Hormuz.
According to Dalio, there is a consensus among government officials and geopolitical experts he consulted that any scenario failing to guarantee safe passage through the strait, even if it leaves Iran with residual negotiating power, would signify a defeat for the US. He cautioned that the repercussions of such a defeat would be significant and self-reinforcing, impacting Gulf allies, global energy markets, allied trust, and potentially challenging the dollar’s status as the world’s reserve currency.
Drawing from historical imperial cycles, Dalio drew parallels between a potential US failure to secure the Strait of Hormuz and past instances such as the 1956 Suez Canal Crisis for Britain. He warned that such a failure could lead to a fundamental shift in how allies, adversaries, and creditors perceive American power. Citing examples from the Dutch and Spanish Empires, he highlighted the pattern where a dominant power loses control of a critical trade route, leading to swift reorganization of financial and geopolitical dynamics around the new power structure.
