'We Are in a World War': Ray Dalio Warns Iran Conflict Is Just the Beginning, Flags Bigger Market Risks

Bridgewater Associates founder Ray Dalio has been warning of an impending collapse of the world order for a while. In his latest X post, the billionaire investor cautioned that we are already in the early stages of a world war, which isn't going to end anytime soon.

What happens with the Strait of Hormuz will have major repercussions worldwide, according to the hedge fund founders. Factors like Iran's capacity or decision to continue inflicting damage to its neighbours, the looming threat of nuclear weapons, and the US ordering boots on the ground, as well as the upcoming US midterm elections, are near-term issues that people are focusing on.

However, Dalio thinks that most people react to 'attention-grabbing things' happening at present instead of looking at the bigger picture because they tend to have a short-term view of the macroeconomic landscape.

Dalio highlighted that multiple 'shooting and non-shooting' wars are going on in an interconnected world, which involve major nuclear powers, analogous to past world wars that comprised interrelated wars and created a classic world war dynamic.

Elsewhere, alliances between China and Russia as well as Russia's alignment with Iran and Cuba form a group largely opposed to the US, Israel, Ukraine, and GCC states. How the US performs in the Iran war, how much it spends on military equipment, and how it defends its allies will be watched by other nations and considerably influence the changing world order.

Furthermore, the US empire, with up to 800 military bases in dozens of countries, means it has likely overextended its powers, making it difficult to fight wars on two or more fronts, which might lead other nations to recalculate and change behaviours over time, creating a classic sequence of steps leading to major wars, which have repeatedly taken place.

'I have many indicators suggesting that we are in the part of the Big Cycle when the monetary order, some domestic political orders, and the geopolitical world order are breaking down. These indicators suggest that we are in a transition stage from the pre-fighting stage to the fighting stage, which is roughly analogous to the 1913-14 and the 1938-39 periods,' Dalio opined.

Considering all potential conflicts worldwide, Dalio concluded that the odds of at least one of them happening over the next five years appear to be greater than 50%.

Many Expect World War III to Start Within the Next Decade

The latest YouGov survey revealed that 53% of Britons believe there is likely to be a world war within the next five to 10 years, while 16% believe it is imminent.

Richard Shirreff, formerly deputy supreme allied commander of NATO in Europe, also cautioned that future historians will see the Middle East conflict as 'the final catalyst for a third world war.'

However, Doug Stokes of the School of International Relations at Modul University Vienna believes that those who see 'the spectre of a third world war are both right and wrong.'

People are wrong if they imply a 'singular, cataclysmic escalation,' but they might be right if they mean a 'structural contest between the US and a loose Sino-Russian-Iranian axis is under way,' and 'fought through proxies, economic leverage, and the systematic contestation of strategic geography.'