Geopolitics

Dalio says US Iran war shows allies it 'will not show up in Asia'

Name: Dalio says US Iran war shows allies it 'will not show up in Asia'
Uploaded: 2026-07-30T07:20:00+00:00
Description: Discussing what he calls the geopolitical “litmus test” of how the US would respond under energy and casualty pressure, Ray Dalio argues the Iran war has changed perceptions among Asian leaders. He says there is now “a recognition” that Washington may be unwilling or unable to play the expected counterbalancing military role in Asia.

Diary of a CEO · Ray Dalio: I Predicted The 2008 CRASH, I Know What Comes Next · July 30, 2026

Diary of a CEO

Ray Dalio: I Predicted The 2008 CRASH, I Know What Comes Next

"What you have is the United States will not show up in Asia."

Discussing what he calls the geopolitical “litmus test” of how the US would respond under energy and casualty pressure, Ray Dalio argues the Iran war has changed perceptions among Asian leaders. He says there is now “a recognition” that Washington may be unwilling or unable to play the expected counterbalancing military role in Asia.

About this episode

Hedge fund founder Ray Dalio tells Diary of a CEO host Steven Bartlett that today’s AI-driven market enthusiasm shows “classic signs” of a bubble and says the data could be “compatible with history” for a peak “very soon”, calling it “the biggest investment bubble in American history”. Dalio lays out his bubble mechanics argument: rapid price rises, leverage, and the need for cash when interest rates rise or shocks hit, forcing asset sales and a reverse feedback loop into the real economy.

Dalio broadens the discussion to his “big cycle” framework, linking debt build-ups, domestic political polarisation, and geopolitical conflict. On the UK, he describes an over-indebted, underproductive country that has “run out of choices”, warning it may require “major restructuring” and using the phrase “go bankrupt” to describe the scale of adjustment. In a separate exchange on wealth taxes, he says governments historically respond to capital flight with tools such as retroactive rules, exit taxes and capital controls, while arguing wealth taxes are difficult to administer.

On geopolitics, Dalio claims the US war in Iran was a “big mistake” that exposed American vulnerability, and he says Asian leaders increasingly believe the US “will not show up in Asia”. He also warns that pressure on Taiwan’s semiconductor exports, including a blockade threat, could crash global markets. The episode ends with Dalio arguing that AI will widen wealth gaps unless societies invest in broad-based education and basic conditions, offering a social-cost example from his home state of Connecticut.

Key takeaways

Dalio says AI markets show bubble signs and could peak soon; he calls it the biggest US investment bubble.
He argues bubbles burst via leverage, tighter money, and forced selling that can spill into the wider economy.
Dalio says the UK is in a late-stage debt and productivity squeeze and may need major restructuring, even “go bankrupt”.
On wealth taxes, he says states may use retroactive rules, exit taxes and capital controls when capital flees.
Dalio calls the US Iran war a “big mistake” and claims it revealed limits to American power.
He warns allies in Asia may doubt US commitments and says a Taiwan chip blockade threat could crash markets.