Wall Street Warning: Lose the Strait of Hormuz, Lose American Hegemony

Trump's appetite for a bold strike is growing. CNN reports that the USS Tripoli, a US amphibious assault ship, has sailed from Okinawa to Singapore and is now heading toward the Middle East. The ship carries 2,200 Marines. One order from Trump and this expeditionary force becomes the tip of the spear in a direct assault on Iran's Kharg Island. The 'ultimate battle' is close. For Trump, losing control of the Strait of Hormuz means losing the war, and the consequences are too severe to accept.

Ray Dalio warns: if Trump can't control the Strait of Hormuz, the US risks repeating Britain's imperial decline.

Ray Dalio, Bridgewater Associates founder and king of market predators, frames it even more starkly: the American Empire has reached a turning point of decline. If the United States loses the Strait of Hormuz, its grip on global hegemony will loosen, tracing the same arc that brought down the British Empire.


Dalio is more than a heavyweight Wall Street fund manager. He has spent years researching the rise and fall of great powers, producing works including Principles for Dealing with the Changing World Order and How Countries Go Broke. On Trump's current 'war of fury' against Iran, Dalio draws parallels with historical precedents and argues that a defeat would be catastrophic for the United States.


Suez Crisis and the Hegemony Parallel

Empires fall in recognizable ways, he argues: weaker nations test dominant powers at critical shipping lanes. When Egypt seized the Suez Canal from Britain, Britain responded with military force to compel Egypt to reopen the waterway, turning the episode into a global flashpoint. Britain lost that 'ultimate showdown,' withdrew its forces, and watched its imperial standing crumble. Capital fled the losing side, its debt and currency status came under assault, and the geopolitical map was redrawn.


The Suez Crisis unfolded fast. In October 1956, Egyptian President Nasser nationalized the canal, stripping ownership from the Suez Canal Company. Britain sent troops to the canal zone and used military force to pressure Egypt into returning control. But the United States and the Soviet Union both intervened, and Britain, caught between domestic and international pressure, was ultimately forced to withdraw. That retreat cost Britain its standing as an international hegemon and marked the beginning of the end for the British Empire, “on which the sun never sets”.


Dalio draws a direct parallel between Britain then and the United States today. If America and Trump lose this 'ultimate battle' and fail to keep the Strait of Hormuz open, it amounts to surrendering control of the strait, directly undermining America's global standing and reshaping the existing international order. The knock-on effects would be severe: the reserve currency status of the US dollar would come under threat, and the fallout would ripple across the globe, reshaping trade flows and capital movements.


The stakes in this 'ultimate battle' are enormous — Trump can't afford to lose, but no decisive move to reopen the strait is in sight.

Can Trump Endure the Pain of War?

So can Trump actually win this fight? Dalio says senior foreign officials have been asking that question in private: Trump talks tough, but when things really go south, will he dare to fight? Can he win?


Dalio reads Iran's strategy as simple: absorb the pain and outlast the Americans. The longer Iran holds out, the sooner Washington blinks. It's a pattern that played out in Vietnam, Afghanistan, and Iraq.


On the American side, the public is already anxious about soaring oil prices, and politicians are worried about the midterm fallout. Tolerance for a long, costly war is thin. Dalio puts it plainly: “In war, one’s ability to withstand pain is even more important than one’s ability to inflict pain.”


By that logic, the United States may be more likely to lose than Iran. Oil prices are already climbing fast, gasoline at the pump is getting pricier, and the public's pain threshold is eroding. The worst is still ahead. If the economy tips into recession, resentment will run deeper still. Moody's economists warned yesterday that if oil prices keep rising over the coming weeks, the odds of a US recession will cross 50%. At that point, the Republican Party faces a potential rout in the midterms.


America's Decline May Be Inevitable

This 'ultimate battle' is about nothing less than the rise or fall of the American empire. Trump knows he cannot afford to lose. But so far, he has shown no decisive winning move. Retracing the British Empire's path of decline may well be America's fate.


Lai Ting-yiu

What Say You?

** 博客文章文責自負,不代表本公司立場 **

The U.S. and Israel's joint attack on Iran has achieved no concrete objectives, yet it has created chaos everywhere—like a raging bull loose in a china shop. The worst part: the two powers cannot stop and don't know how to end it. Trump has created a disaster. Nothing goes right. He's becoming increasingly hysterical, now lashing out at the media. Tucker Carlson, once a devoted MAGA believer, has become Trump's enemy and political target simply because he harshly criticized the Iran attack. Carlson revealed yesterday on X platform that the CIA in an attempt to destroy him has fabricated charges against him, submitting a report to the Department of Justice proposing to prosecute him as an unregistered Iranian 'agent'.

Once a MAGA star, Carlson opposed Trump’s Iran war, got branded an unregistered “Iran agent” by the CIA, and now faces a planned DOJ indictment.

Other media outlets criticizing the war have also come under pressure. The Federal Communications Commission chairman has threatened to revoke their licenses immediately if they continue publishing 'fake news' about the war, completely disregarding the principle of press freedom.

Carlson was formerly a talk show host at Fox News and a core MAGA member with conservative right-wing positions. Trump had always regarded him as 'one of us' and allowed him access to meet and discuss matters. But like many MAGA supporters, he opposes Trump's 'Operation Epic Wrath' against Iran, believing the United States should avoid prolonged foreign wars. This directly contradicts the MAGA ideology. His strong anti-war stance naturally enraged Trump, who immediately turned against him, angrily declaring 'he has lost his way and no longer belongs to MAGA'.

What further displeased the war hawks was Carlson’s exposure that this war 'is being fought for Israel's interests', which stirred anti-war sentiment among MAGA supporters and severely undermined Trump's efforts to gain public support for attacking Iran. He also condemned the U.S. military's accidental missile strike that killed nearly 200 Iranian elementary school students, calling this atrocity inhumane and stating 'such a nation is simply not worth fighting for'.

Trump is notoriously narrow-minded and would certainly not let Carlson's criticism slide. Given his character, he would definitely take action to silence him. Last night, Carlson posted on X platform stating that the CIA is preparing to take action against him and has already submitted a report to the Department of Justice regarding alleged criminal charges. What are the charges? He said it concerns his communications with Iranian officials before the war.

The CIA has intercepted his text messages, and the Department of Justice intends to prosecute him under the Foreign Agents Registration Act. This law requires that anyone receiving funding from a foreign government to conduct lobbying must register with the Department of Justice, otherwise it constitutes a violation.


Carlson, naturally, vehemently denied taking Iranian money. He swore he needs no foreign funding and owes his sole loyalty to America. His protests fell on deaf ears. The CIA has extensive material on him, and prosecutors could build a case without much difficulty. Once the target is marked, there's no washing away the stain. This pattern—using law enforcement as a tool of political intimidation—has become routine in America.

Trump's media crackdown extends well beyond Carlson. Recently, the White House and Department of Defense jointly attacked CNN, The New York Times, and The Wall Street Journal, accusing them of publishing inaccurate coverage of the Iran war—what they call "fake news" designed to undermine America's military position.

The President's fury was swift. The Federal Communications Commission, which oversees broadcast licensing, issued a stark warning: media outlets must serve the public interest, and those spreading rumors or distorting news will lose their licenses. Translation: continue publishing reports that damage the war effort against Iran, and your broadcast license gets revoked. The threat dismantles any pretense of the "press freedom" America claims to champion.

Trump’s Iran gamble is a mess; furious at media critics, he leans on regulators to threaten their licenses.

Since Trump launched war on Iran, he's locked himself in a trap with no exit. Yet he refuses to step back, doubling down instead. Each move makes him more erratic, more ruthless toward American media. He's resorting to outright suppression. With his own hands, he's demolishing America's myth of "press freedom." In doing so, at least, he's inadvertently showing the world what America actually is.

Lai Ting-yiu