The Battle to Control Hormuz Will Be the ‘Worst Phase' of the Iran Conflict. Here's Why, According to Ray Dalio

• Dalio views control of the Strait of Hormuz as critical to U.S. global dominance, stating that leaving it in Iranian hands would make 'everyone hostage to the Iranians' and signal Trump 'picked a fight and lost'
• The U.S. dollar index has gained approximately 2.7% since late February while gold has declined over 2%, contrary to Dalio's recent investment advice to buy gold and avoid the dollar
• Dalio argues the cumulative effect of post-WWII conflicts including Vietnam, Afghanistan, Iraq, and Iran jeopardizes the global power dynamic that the U.S. has led for decades

Summary: Ray Dalio Warns Strait of Hormuz Battle Could Reshape Global Order

Key Points:

Ray Dalio, founder of Bridgewater Associates, warns that the struggle for control of the Strait of Hormuz represents a "final battle" that could fundamentally alter the global power structure beyond mere oil price impacts. In a Monday Substack post, Dalio argues this conflict may signal the end of American dominance, viewing it as the cumulative result of post-WWII military engagements including Vietnam, Afghanistan, Iraq, and now Iran.

Market Data:

• U.S. Dollar Index (DXY): Up 2.7% since late February when Iran conflict began
• Gold prices: Down approximately 2% to just above $5,000 per troy ounce over the same period
• Despite dollar strength, gold remains elevated above $5,000/oz

Strategic Implications:

Dalio contends that control of the Strait of Hormuz is critical to U.S. credibility. The Trump administration must wrest control from Iran to reassert American power and "bolster confidence" globally. Conversely, if Iran retains control, it would make global allies and the world economy "hostage to the Iranians," representing a perceived defeat for the U.S.

Investment Positioning:

Despite recent performance divergence, Dalio maintains his advice to investors: favor gold and avoid the U.S. dollar. The dollar's recent strength suggests it remains a haven asset during crisis, though Dalio sees longer-term structural challenges to American dominance.

Bottom Line:

The battle transcends energy markets, potentially determining which nation will lead the next global order.