The End of Financial Neutrality and the Rise of the Tangible
We are witnessing the "weaponization of the ledger." For decades, the global economy operated on the assumption that sovereign debt—specifically U.S. Treasuries—was the ultimate risk-free asset. That assumption is dissolving.
In a world defined by intensifying geopolitical friction, holding another nation’s paper is no longer a purely financial decision; it’s a strategic vulnerability. When "Capital Wars" begin, foreign reserves can be frozen, and debt can be devalued. This is why we see a massive, quiet migration of capital:
From "Paper" to "Physical": Central banks aren't just diversifying; they are retreating into gold and commodities to eliminate counterparty risk. If you don't hold it, you don't own it.
The Debt Trap: As international buyers exit the bond market, domestic central banks are forced to step in. This creates a "monetary feedback loop" where the only way to fund the government is to print the money to buy the debt, inevitably eroding the currency’s purchasing power.
The New Market Hierarchy: The historical dominance of growth-heavy tech is being challenged by the stability of hard money. In an era of instability, the market prizes certainty of value over projection of earnings.