【Iran Crisis】Crocodile King Dalio: Battle for the Strait of Hormuz Becomes "Final War"! Warns US Reserve Currency Status at Risk If Defeated

Bridgewater founder “Crocodile King” Ray Dalio warns on social platform X that allowing Iran to blockade the Strait of Hormuz—the world’s most important waterway—would cause significant damage to the United States, its regional allies, especially Gulf allies, countries heavily dependent on oil flow, the global economy, and the world order.

Dalio emphasizes that the passage through the Strait of Hormuz must be secured at all costs,

“If Donald Trump and the United States do not win this war—where victory can be easily measured by whether they can ensure the safe passage through the Strait of Hormuz—they will also be seen as responsible for creating a disastrous situation they cannot control… The result will be: President Trump and the United States will fail.”

Dalio: Human and financial capital will quickly flee the losers, impacting bond, currency, and gold markets

Dalio points out that countless cases show that a weaker country challenging a global superpower for control of a critical trade route (such as Egypt challenging Britain over the Suez Canal in the 1950s) results in the dominant power (like Britain) threatening the weaker country (like Egypt) to open the route. “Everyone observes and adjusts their attitudes and capital flows based on how the situation develops.” He describes the control of the Strait of Hormuz as a decisive “final battle” that determines victory or defeat and the fate of empires, reshaping history because human and financial capital will naturally and rapidly shift from the losers to the winners. These shifts will impact markets, especially debt, forex, gold markets, and geopolitical power.

Dalio states: “When the global dominant power with the world’s reserve currency is over-leveraged financially and exposes its weaknesses due to simultaneous loss of military and financial control, watch for allies and creditors losing confidence, its reserve currency status eroding, debt assets being sold off, and currency devaluation—especially relative to gold.” He mentions that, conversely, when the global superpower demonstrates military and financial strength, it boosts confidence and the willingness to hold its debt and currency.

Source: Dalio’s X post