Editor's Note: In most wars, disagreement and uncertainty are often the norm. But in this conflict surrounding Iran, the criteria for victory are unusually clear: who controls the Strait of Hormuz.
This is not just an energy transportation route; it is the "valve" of global capital flows and the geopolitical power structure. Once the right of passage is weaponized, its impact will quickly spill over into oil prices, inflation, financial markets, and even the entire international order.
Ray Dalio's judgment in this article is quite direct: if Iran retains control of the Strait of Hormuz (even just as a bargaining chip), this war will be seen as a failure for the United States. And the significance of this failure goes far beyond the gains and losses of a military operation.
Starting from historical comparisons, the author points out that such pivotal moments often correspond to turning points in power structures. Building on this, the conflict is placed within the larger framework of the "big historical cycle," suggesting that the current situation in the Middle East is just one part of the co-evolution of debt, politics, and geopolitical patterns.
When the outcome of a war can be measured by whether a strait remains open, its significance is no longer confined to the Middle East but points to the next phase of the entire world order.
Below is the original text:
Comparing what is happening now with similar situations in history, and then calibrating my thinking with the judgments of better-informed and more experienced decision-makers and experts, has always helped me make better decisions.
I have found that it often comes with huge disagreements and surprises about the future direction. However, regarding this conflict, there is almost no dispute on one judgment: the key lies in one point—who controls the Strait of Hormuz.
The consensus I have heard from government officials, geopolitical experts, and observers from different regions around the world is: if Iran still holds control over the passage of the Strait of Hormuz, or even just retains the ability to use it as a bargaining chip, then:
The US Will Lose, Iran Will Win
The US will be seen as having lost this war, and Iran will be seen as the winner. The reason is simple. If Iran can use the Strait of Hormuz as a "weapon," it means the US does not have the ability to resolve this issue.
This strait is one of the world's most critical energy channels, and its right of passage should be guaranteed at all costs. Because if it is blocked by Iran, it will harm not only the US but also its Gulf allies, countries dependent on oil transportation, the global economy, and even the entire international order.
In terms of outcome, the victory or defeat of this war can almost be measured by one indicator: whether the safe passage of the Strait of Hormuz can be guaranteed. If Trump and the US cannot "win" this war, they will not only be seen as losers but also as having created an unmanageable situation.
As for why they can't win, it doesn't really matter. Is it due to domestic anti-war sentiment affecting the midterm elections? Is American society unwilling to bear the cost of war? Is it a lack of military capability? Or is it the inability to rally allies to jointly maintain the opening of the航道?
None of this matters. The result is only one: the US lost.
From a historical perspective, the significance of such a failure could be very serious. Losing control of Hormuz might be for the US what the 1956 Suez Canal Crisis was for Britain (where Britain was forced to concede on the canal issue, leading to a global power shift), or 17th-century Spain (which lost its advantage due to fiscal overextension and weakened sea power), or 18th-century Holland (which declined as its trade and financial center status was replaced by Britain)—all iconic moments of imperial decline.
History repeatedly plays out similar scripts: a seemingly weaker nation challenges a dominant power on a key trade route; the dominant power issues threats, and the world watches the outcome; then, based on victory or defeat, positions and capital are redistributed.
This "decisive battle" that determines victory or defeat often quickly reshapes history because people and money instinctively flow to the winner. This shift is directly reflected in the markets—bonds, currencies, gold, and the deeper geopolitical power structure.
Based on a large number of historical cases, I have summarized a simple but important principle: when a dominant country with reserve currency status overextends itself fiscally and simultaneously shows fatigue militarily and financially, be wary that allies and creditors may begin to lose confidence, debt may be sold off, the currency may weaken, and even its reserve currency status may be shaken.
If the US and Trump cannot control the shipping flow of Hormuz, this risk will significantly increase.
In the past, it was taken for granted that the US could militarily and financially overwhelm its opponents. But Vietnam, Afghanistan, Iraq, plus this potential conflict, their cumulative effect is eroding this belief and shaking the post-war international order led by the US.
Conversely, the same holds true: when a dominant country demonstrates clear military and financial strength, confidence is reinforced. For example, Ronald Reagan quickly secured the release of hostages in Iran after taking office and provided escort for oil tankers during the Iran-Iraq war, both of which strengthened US deterrence.
If Trump can deliver on his promise to ensure the Strait of Hormuz remains open and suppress the Iranian threat, it will significantly enhance external confidence in US strength.
On the other hand, if the Strait of Hormuz falls into Iran's hands and is used as a tool of threat, the world will become its "hostage." This not only means the global energy lifeline is "held hostage" but also means the US "started a war but failed to win it" in this conflict. Trump's credibility will be directly impacted, especially since he has already made strong statements.
Many foreign policymakers privately have quite direct views: "He talks tough, but at the critical moment, can he win?" Some observers are even watching this conflict as an "ultimate showdown," like watching a gladiatorial arena or a championship final.
Trump is calling on other countries to join the escort operation, and whether he can truly organize allies is itself a test of capability. The reality is that relying solely on the US and Israel, it is difficult to ensure航道 safety without weakening Iran's control, which likely requires a truly large-scale conflict.
Iran's attitude is in stark contrast to that of the US. For them, this is a war of belief and survival. They are willing to bear greater costs, even sacrifice lives. American society is more concerned about oil prices; American politics is more concerned about elections.
In war, who can "endure pain" is often more important than who can "inflict pain."
Iran's strategy is likely to drag out the war, prolong the pain, until the US loses patience and withdraws. Once this happens, US allies will quickly realize: the US will not always stand behind them.
"Negotiated Settlement" is Only a Superficial Option
Although there are discussions about ending the war through an agreement, everyone knows: an agreement cannot truly solve the problem. Almost everyone understands that such conflicts cannot be truly ended by agreements. What really determines victory or defeat is the upcoming "decisive battle."
Whether the result is Iran continuing to control Hormuz or its control being taken away, the conflict will enter its most intense phase. This "final decisive battle" that determines victory or defeat is likely to be very large in scale.
The Iranian military has stated: "Any regional energy facilities related to or cooperating with the US will be completely destroyed." This is the action they might take. If the Trump administration successfully联合 other countries to send warships for escort, and the航道 has not been mined, then this might be a solution path. But both sides know that the real decisive battle is still ahead. If the US cannot reopen the strait, the consequences will be extremely serious; conversely, if Trump wins this battle and eliminates the Iranian threat, it will greatly enhance his prestige and demonstrate US strength.
The "Decisive Battle" Will Affect the Globe
The direct and indirect impacts of this "decisive battle" will ripple across the globe. It will affect trade flows, capital flows, and the geopolitical landscape related to China, Russia, North Korea, Cuba, Ukraine, Europe, India, Japan, and others. More importantly, this conflict is not an isolated event but part of a larger "historical cycle." This cycle is driven simultaneously by financial, political, and technological forces. The Middle East situation is just one facet.
For example, whether a country can win a war depends on the number and intensity of its wars, its domestic political situation, and its relationships with countries sharing similar interests (like Iran, Russia, China, North Korea). No country has the ability to fight multiple wars simultaneously, and in a highly interconnected world, wars, like pandemics, spread in unpredictable ways.
Meanwhile, domestically, especially in democratic countries with significant wealth and value divisions, there is always fierce debate around "whether to go to war, and who bears the cost (funds or lives)." These complex chain reactions, though difficult to predict, usually do not end well.
Finally, I want to emphasize that I am not speaking from a political stance but as someone who must make judgments about the future. By studying the history of the rise and fall of empires and the change of reserve currencies over the past 500 years, I have summarized five major forces driving changes in the world order:
1) The long-term debt cycle
2) The cycle of rise and fall of political orders
3) The cycle of international geopolitical orders
4) Technological progress
5) Natural events
The current Middle East situation is just a片段 in this "big cycle." Although it is impossible to predict all details precisely, the operating state of these forces can be observed and measured.
History may not repeat itself exactly, but it often rhymes. What's truly important is: you need to judge whether this "big cycle" is happening, which stage we are in, and how you should act against this background.
