Source: Fortune
Summary
Ray Dalio, founder of Bridgewater Associates, warned that the conflict between the US, Israel, and Iran over the Strait of Hormuz will determine the fate of the American-led global order. Dalio compared a potential US failure to Britain’s humiliation during the 1956 Suez Canal Crisis. He argued that the US is overextended financially and that a loss of control over the Strait would lead to a loss of confidence, reserve currency status, and the selling of debt assets.
Our Reading
The numbers tell one story. Ray Dalio’s warning suggests that the conflict over the Strait of Hormuz is a decisive confrontation that will determine the fate of the American-led global order. Dalio’s comparison to the Suez Canal Crisis implies that the US is facing a critical test of its power and influence. The fact that Iran has reportedly agreed to open the Strait to oil tankers that trade in yuan rather than dollars adds to the sense of urgency. The outcome of this conflict will have far-reaching consequences for global trade, capital markets, and the dollar’s reserve currency status. “Both sides know that the final battle, which will make clear which side won and which side lost, still lies ahead.”
Author: Evan Null
