I believe that we have entered the moment when it becomes broadly understood that the United States can no longer dictate the terms of world affairs. The Iran War represents the sunset of the American Empire. It is our Suez Canal moment. Ultimately, I anticipate this will prove to be for the good of the United States and the world but it’s going to get rough.
We have effectively ceded control of the Strait of Hormuz, which impacts a global economy that depends on Gulf oil, gas, fertilizer and many other goods. We are unable to force the end of the war on favorable terms. Iran, a country with a military that is a rounding error of the U.S. military budget, outmaneuvered the most feared military on the planet with a war response strategically focused on their ability to sustain hardship and inflict damage with cheap drones. The United States started the war without sufficient foresight and President Trump has now been seeking China’s help to clean up the mess because there are no good options for America to do so alone. President Xi Jinping made it clear in the recent summit that a hands-off approach to Taiwan is the likely price. That summit showed that China considers itself to be a co-equal geopolitical power to the United States.
The power of determining what comes next in the Persian Gulf region is reverting to Iran negotiating with China, Pakistan, other Gulf countries (especially Qatar), and oil and gas-dependent nations for a cessation of hostilities that almost definitely includes accepting Gulf of Hormuz tolls, which they are formalizing with Oman. Iran could ask that these tolls are paid in yuan or cryptocurrency, further moving away from American dominance. Gulf countries with American bases will likely ask America to leave in order to preserve good relations with Iran.
As a result of the war and the resulting downstream damage to the world economy, American global alliances are in the worst shape of the last 80 years. The petrodollar, in which global oil trade is conducted in dollars, is now in serious jeopardy, which undermines the dollar’s status as global reserve currency, which in turn makes America’s massive $39 trillion debt more unsustainable. The American Empire era has depended upon both military and economic dominance. When both end, as is now in motion, the world order reshuffles.
Iran will likely emerge in a stronger position, which will inspire other countries to stand up to American military and economic intimidation as well. Drone technology has proven cheap and effective at hobbling the pricey, high-tech American military, which depleted close to half its stock of defensive missiles in the Iran War. We can expect that every country that can will mass produce drones for self-protection. Also we can expect that every country in the world is now making the transition away from an oil economy their most important security imperative for the coming years. The economic pain coming in the latter half of this year is going to force that. So while America remains the leading producer of oil in the world, by 2030, we will be the winner of a declining game. Chinese production of solar and wind tech is rapidly accelerating and centering their role in the global economy even more. Their capacity to scale production on renewable energy is vast, the world demand is soaring, and the costs are plummeting. Oil is going to enter a phase of rapid decline.
In the meantime, we have yet to feel the full shock of the Hormuz blockage as we’re depleting strategic reserves to mitigate the loss of close to 20% of global supply. Last week saw the draw down of 17.8 million barrels of strategic reserves in the United States, a pace that can be sustained for a few months at most. By summer, the global damage is promising to get worse as reserves can no longer buffer the impact and large-scale demand destruction will be required. The resolution will take months after Hormuz is open. The full oil shock could well be cataclysmic. Elevated oil prices will lead to more inflation, which in turn may trigger debt crises in the developing world that can domino into the broader system. Meanwhile, Trump is still trying to intimidate Iran into favorable terms, which will delay resolution and make the impact of the oil energy and supply shocks more severe. Qatar may be able to broker a deal as they are motivated, trusted by Iran and the United States, but the terms are likely to be onerous for the United States and particularly difficult for Trump to accept, which argues it will take time.
As this year continues to unfold, with political and economic crises at home and a diminishing roster of allies, it appears that America will be forced into retreat globally. Former allies will blame America for the impact of the war, which has already done broad economic damage and will be contributing to what is promising to be widespread famine as a result of blocked fertilizer, especially in combination with a a very large El Nino brewing, which is historically associated with major food disruptions. So our global situation is promising to get worse and America will take the primary blame. The United States failed to wield our power wisely and everyone else is paying heavy consequences. They will not make the mistake of trusting us if they don’t have to. Which is going to mean that the world order will reassemble around a new constellation of power centers and agreements.
A key aspect of this change is that the petrodollar (the requirement to trade oil in dollars that is central to the system) is already waning, which will reduce the need for countries to buy US bonds and result in major economic impacts on the American economy. Americans are blind to the benefits of the reserve currency arrangement in terms of boosting our economy and purchasing power. As that status corrodes, we will have to face the downstream impact of the world not treating us as the global safe haven, which has given us an advantage as consumers. Our houses, cars, and industries are not nearly as energy efficient as the rest of the world and the economic shocks are likely to force a level of frugality and economic discipline that we haven’t had to do for a long time. As inflation increases, companies will have lowered earnings, and then engage layoffs to trim costs, which contributes to a cycle of contraction. It’s not going to be overnight and there are variables in how it plays out, but the economic leaks are happening and I don’t believe they are fully reversible.
The end of American dominance has never been predicated on someone defeating the United States on our own soil. Iran’s ancient Persian civilization has endured more external assaults than perhaps any other by virtue of its longevity. They built an asymmetric war strategy that proved formidable. They were underestimated militarily and strategically and that underestimation has done lasting damage to American hegemony globally. In the end, I think historians will conclude that the Iran War ended the American Empire, an 80 year time span that has been historically a time of greater peace and prosperity. The protection extended by America has been self-serving AND it has benefited the world as well. It’s been a deal worth making for most of the planet. But I see it ending now and I want to explore the repercussions of this, which are painful in the short and medium-term and more beneficial in the long-term.
Ultimately, on the horizon of decades, I think the ending of the phase of American Empire will be for the good of the United States. We have overstretched our core capacities in the attempt to govern the world by a combination of soft and hard power. In doing so, we have corrupted the nobler parts of our mission in the service of gaining power, money, and dominance. As the saying goes, power corrupts and absolute power corrupts absolutely. Absolute power became corrupted and led us to become the target for many other nations seeking to influence that power. The overt corruption of President Trump is making this visible and exaggerating it to the point where everyone can see it. America is no longer seen as a nation governed by principles and only by power. That impacts us in many overt and covert ways.
The obsession with power has restrained the more evolutionary gifts of America. In the face of humbling loss and the waning of our status and power, our higher gifts will have a chance to come to the forefront. That is the silver lining. It will take some time to unfold but ultimately, I see America playing our most noble role through cultural influence rather then imperial imposition. It’s by demonstrating a better path rather than dominating others. Influence respects the dignity and sovereignty of other nations whereas empire seeks to subjugate them in overt and covert ways. Empire is, by its nature, extractive and exploitive. And that is a lesser form of leadership. I believe the loss of the Iran War will set off a cascade of changes that will be difficult to navigate but ultimately lead to a more evolved world that is built on synergy and sovereignty rather than dominance and extraction. So long as the United States could dictate the terms of the world by force, we were in one civilizational pattern and it’s now time for the next.
The history of modern civilization is one in which there has been constant competition for dominance. The allures of dominance have led many countries to build empires of dominance but then the dominance seeds its own demise. The countries that have once been dominant empires eventually mature into the kind of culture that the planet truly needs now. Looking to England, Spain, the Netherlands, Japan, Germany, and others gives us insight into what a post-empire America can look like. They each have their strengths and a high quality of life. They are no longer trying to impose their will on other countries and extract labor, resources, or tribute through force. They are advocates for a just society and the rule of law internationally.
Some of the things that I believe will change in this new American era will include the fixation on money. Money conveys power and that’s part of why American culture has been obsessed with money, which has led to increasing stratification of wealth, increasing corruption of politics, and a decadent class of elites personified by the Epstein files. This pattern of increasing corruption of elites in the waning phase of empire is typical. This elite corruption degrades the culture as the empire wanes. The full exposure of the corruption is thus a necessary part of the maturation of the society to one that is built on higher principles and commitments than maximum personal gain.
As part of the need to maintain dominance, American society has also been preoccupied with violence at all levels, from violent sports like the UFC or American football to violent video games to fetishisizing military violence. This preoccupation with violence fuels the psychology of military and economic dominance. It reinforces a distorted form of hyper-masculinity, a suppression of empathy and increasing acts of cruelty in the society. The end of American Empire opens the pathway for American culture to become more harmonized, balanced in masculine and feminine archetypal qualities and healthy in its expression. Peaceful collaboration can become a primary value over raw aggression. The end of empire means that aggression begins to lose its central organizing force in our culture. This will ultimately make the United States a much happier country as the countries that rank higher on scales of happiness invariably do a much better job of supporting the flourishing of all citizens and investing in the foundations for human growth, from education to healthcare.
It’s important, I believe, for America to offer the world a cultural demonstration of the transition from an empire psychology of dominance to a collaborative psychology, one based on sacred respect for other peoples of the world. This demonstration can help to curb the impulse in other countries to try to replace America either regionally or globally as a dominant power. If they see that the loss of empire power by the United States leads to a flourishing of our culture, an increase in well-being, and the fulfillment of America’s democratic values, then it makes them less likely to pursue the path of military dominance as they see that doing so is a path to suffering.
If approached with wisdom and humility, the ending of American Empire can become the moment when the planet as a whole begins to evolve beyond the deeper psychology of empire, not in one singular moment but in a natural progression. This is vital because the technological powers of AI give modern empires a particularly dangerous pathway for countries to follow into mass surveillance, violence and subjugation, which is a recipe for a dystopian future.
The loss of the Iran War is catalyzing the dissolution of American empire. Trump may attempt to refocus elsewhere and take over Cuba or Greenland or exert military power in another direction that promises a “win.” Or retract to military dominance of the Western hemisphere. But American hegemony will have been shown to be partial and the other nations of the world will forge new alliances that de-center from the United States.
America’s physical power will wane. But our spiritual power can rise and find a higher expression.
For me, that recognition is key to enduring the economic pain, political unrest, and humbling processes that the coming years will require of our country as we face the corruption, distortion, and horrors that have been in our shadows. The Epstein files will contribute to the unraveling as it is clear the tentacles run deep into the power structures. More of the devastation we have caused to other countries and peoples in the name of empire will be revealed. America will go from being revered to being ridiculed and perhaps even reviled for a time. We have already lost the world’s trust. We are losing their good opinion. And we are about to lose the economic benefits that came from global dominance.
Going through this full cycle of the collapse of an empire, though, is what can eventually lead to our rebirth as a noble, principled nation that is a shining example for the world. If we keep our eyes on that and do the hard inner work this journey will require of our country, America will rise in a more mature form.
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