Will The Iran War Trigger A Dollar Crisis?

The oil spike has moderated and markets are mellow for the time being, but could the long-term economic consequences of this war just be getting started?

U.S. allies have shown a lackluster response after President Trump’s request for assistance in reopening the Strait of Hormuz — a corridor carrying roughly 20% of global oil supply — and this may spell a trend of what’s to come. What happens when oil-producing Gulf states have had enough of our/Israel’s foreign policy machinations and, as a result, begin to de-dollarize or offload U.S. sovereign debt?

Tonight at 7pm ET, wealth manager Peter Schiff, proponent of the Austrian school of economics, and Rabobank global strategist Michael Every will square off on these questions and debate whether the Iran war will undermine the foundations of dollar dominance.

Moderating the discussion is the great Dave Collum, chemistry professor at ZeroHedge and long-time friend of ZH.

Schiff: Dollar’s Days Numbered

Schiff has long argued that U.S. fiscal deficits, monetary expansion, and reliance on foreign capital have put the dollar on an unsustainable trajectory. In recent commentary on the Iran conflict, he warned the war could accelerate those vulnerabilities.

The U.S. economy and labor market were already weakening, and inflation strengthening, before the war with Iran began. Now, as those problems get worse, Trump can blame them on a war he will insist we had no choice but to fight. Stagflation will be sold as the cost of freedom.

— Peter Schiff (@PeterSchiff) February 28, 2026

According to Schiff, the combination of higher oil prices, massive war spending, and renewed inflation pressures could trigger a severe economic downturn and destroy purchasing power for Americans. The conflict could be the catalyst that finally exposes structural weaknesses he has warned about for years: a heavily indebted U.S. economy dependent on monetary stimulus and foreign financing.

When other countries start offloading their dollars, it may be rapid and jarring. As Schiff is fond of saying, stocks take the escalator up and the elevator down. 

Every: Manufactured Hegemony

Rabobank’s Michael Every takes a different approach.

Less worrisome, he sees Hormuz being opened in two to three weeks:

1/2

Some thoughts on the Iran War on CNBC which are not quite as their headline puts it.

Our base case remains thst Hormuz is reopened by the end of this month or early April.

Yet geopolitically, that’s more likely to be through US force escalation (“The only way out is…

— Michael Every (@TheMichaelEvery) March 16, 2026

Rather than collapsing the dollar, crises can actually reinforce its dominance, as global investors rush into U.S. assets during periods of uncertainty. Indeed, in the opening days of the Iran conflict the dollar initially strengthened even as global markets tumbled.

Every also sees the war as a geopolitical chess move that can strengthen the U.S. dollar. If the post-war Iranian regime is more subservient to the Americans, they would control another crux of the world’s energy trade.

Tune in tonight at 7pm ET to witness the showdown. Right here on the ZeroHedge homepage and streaming on X.