2. MALAYSIA - COLONIAL LEGACY, MULTICULTURAL DILEMMA, FUTURE

1 November 2025

Malaysia is a story of compromise — between empire and independence, race and merit, politics and performance. Half a century after British rule ended, the country still wrestles with the question it inherited: how to build unity from diversity without losing either.

Tag these articles: SEATMS

2. MALAYSIA’S COLONIAL LEGACY AND MULTICULTURAL DILEMMA

Based on in-country interviews

1. The Colonial Blueprint

Modern Malaysia was built on British design. The Empire imported Chinese and Indian labourers to work in mines, plantations, and public works.

Malays were kept in agriculture and the civil service. This created a three-tier society: Malays on the land, Chinese in commerce, Indians in manual labour.

It was efficient for the colonial extractive economy but destructive for national unity. The British system separated communities into economic niches - what sociologists later called a plural society, where groups coexist without integrating.

2. The Ethnic Contract

Independence in 1957 handed power to a Malay-led coalition. The unspoken deal was simple: Malays would dominate politics, while the Chinese retained much of the economy.

In 1971, the New Economic Policy (NEP) formalised this through ethnic quotas for education, jobs and business ownership. It aimed for balance, but produced bureaucracy and resentment. This significant policy was developed following the race riots of 1969.

The 13 May 1969 "race riots" forced Malaysia into emergency rule, suspended Parliament and triggered the New Economic Policy, reshaping the nation’s race-based politics and economy. 

Half a century later, the NEP remains entrenched. Economic growth slowed as talented Malaysians - especially non-Malays - left for Singapore and beyond.

3. Diverging Destinies: Malaysia and Singapore

Singapore, under Lee Kuan Yew, rejected racial quotas. Meritocracy became law. Exam results, not ancestry, decided your future.

Malaysia, by contrast, kept ethnic safeguards in exchange for political peace. Both succeeded in their own way: Singapore rich but rigid, Malaysia stable but slow.

The contrast today is stark. Singapore’s GDP per capita exceeds Malaysia’s fourfold - the price and the reward of meritocracy.

4. The Resource Illusion

Malaysia appears wealthy. It has oil, gas, palm oil and tin. Yet this prosperity hides dependence.

Government-linked companies (GLCs) such as Petronas dominate key industries. They fund development, but they also fund political networks.

Scandals like 1MDB exposed how state control breeds corruption. Malaysia remains stuck in the middle-income trap - too costly for low-end production, too risk-averse for innovation.

5. Forgotten Minorities

Colonialism also produced hybrid communities - the Eurasians and Kristangs of Malacca. They are small in number, rich in heritage, but largely invisible politically.

They represent Malaysia’s cultural depth, yet the country rarely rewards diversity beyond symbolism.

Eurasians in Singapore, though a very small minority, have an economic and cultural impact that far outweighs their numbers... . they are "punching above their weight". Their distinct identity stems from centuries of cultural blending - mainly Portuguese, Dutch, British and local Malay lineages - producing a community fluent in both Western and Asian worlds.

They tend to excel in education, languages, arts, and also public service, often bridging cultural divides with characteristically natural ease. This adaptability - a blend of European discipline and Asian pragmatism if you like. This creative spirit, though perhaps visible politically, gives them a significant influence in law, media, and academia.

In the future, as Singapore and Southeast Asia move deeper into global multiculturalism, the Eurasian model of hybrid identity could become a social prototype: cosmopolitan, bilingual, rooted yet open. They represent what small nations increasingly need: people who can move between worlds without losing their own identities.

6. Crony Capitalism in Socialist Clothes

Malaysia is often called socialist. In truth, it practises state capitalism. The government owns and directs much of the economy, but for patronage rather than equality.

The NEP’s ethnic balancing replaced class struggle with racial entitlement. There is no strong welfare state, weak labour rights, and underfunded healthcare.

Wealth flows upward through GLCs, not downward through redistribution. It’s capitalism with ethnic quotas - or, as one of the interviewees put it, “socialism for the connected.”

7. Singapore’s Counterpoint

Singapore’s model is the mirror image: small, centralised, technocratic.

Lee Kuan Yew enforced efficiency, not comfort. Civil rights were secondary to results.

Malaysia values pluralism; Singapore values performance. One protects identity, the other rewards achievement. Both exclude something essential - Malaysia lacks drive, Singapore lacks warmth.

8. The Malaysian Crossroads

Malaysia faces a defining choice:

- Continue with ethnic protectionism and risk long-term stagnation.

- Or shift towards meritocracy and risk social upheaval.

The brightest Malaysians are already voting with their feet. The country risks losing not just its talent, but its confidence.

9. Lessons from the Colonial Past

The British left Malaysia with roads, schools, legal system, accounting practises, a parliament even ... and also divisions.

The challenge now is not to erase difference, but to modernise it ie to turn diversity into "strength rather than suspicion".

If Malaysia can elevate merit over ethnicity, cooperation over patronage, its pluralism could become its greatest asset.

10. Conclusion

Malaysia’s struggle is not about geography or race. It is about governance.

Colonial structures still shape its politics, but they need not define its future.

The question is no longer who owns the soil 

(Bumiputra = indigenous Malays given preferential rights in the name of national equity and stability),

but how to organise the future.

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POWER AND THE GEOGRAPHICAL PIVOT OF HISTORY

31 October 2025

THE GEOGRAPHICAL PIVOT OF HISTORY

Background

Let's get under the skin of these global power players - such as the neocons - and feel where they are coming from. 

The fundamental number one essential idea that we must understand before everything else is that the battle is about global sovereignty. Sovereignty, power, is primordial because no one wants to have a boss and be told what to do - instead if it is you the global sovereign then it is you that sets the rules for everyone else and if it is not to you then you have to follow someone else's rules at the expense of your own interests. The elite got there because they are - unlike most of us - interested in pure power, control and setting the rules and agenda for others to dance to.

Summary

Over one hundred years ago, Halford Mackinder warned that control of the Eurasian landmass would decide the fate of global power. Today, as land powers rise and maritime empires weaken, his warning feels prophetic. The West still believes it commands the seas — yet it is strategy, not geography, that has changed the game.

From Greater Europe to Greater Asia

1. The Central Idea

• Geopolitics means the study of how geography shapes this power - political power to decide who gets what in the carve up.

• Mackinder’s focus was Eurasia — the vast continent linking Europe and Asia, stretching from the Atlantic to the Pacific and from the Arctic to the Arabian Sea.

• His principle was blunt - who controls Eurasia controls the world. It goes like this:

"Who rules East Europe commands the Heartland;

who rules the Heartland commands the World-Island;

who rules the World-Island commands the world."

• For centuries, this single geographical fact has driven the rivalries that defined power and global history.

2. From Silk Road to Sea Power

• Ancient Eurasia was connected by the Silk Road - decentralised land and sea routes carrying ideas, culture, and goods.

• The Mongols were the last to keep that system open. Its collapse in the 14th century gave way, two centuries later, to a maritime revolution.

• European explorers - Magellan, da Gama, Díaz - linked continents by sea, creating a new power system centred on ports and maritime choke points.

• Maritime trade could be monopolised; land trade could not. And with the Industrial Revolution, European powers gained the technology to dominate both commerce and colonisation. Financial was the third source of British power.

3. Pax Britannica: The First Global Sea Empire

• By the 19th century, Britain had defeated France and Napoleon, establishing Pax Britannica, a century of peace enforced by naval supremacy.

• The Royal Navy’s control of global routes was the backbone of world order, later inherited by the United States.

• Yet during this same period, Russia’s push through Central Asia exposed Britain’s vulnerability: sea power alone could not control the interior of Eurasia.

• The 19th-century Great Game. This was the long duel between Britain and Russia over Central Asia that ended with Afghanistan as a buffer state. But the Trans-Siberian Railway soon gave land power a new reach from Moscow to the Pacific.

4. Mackinder’s Warning

• In 1904, Mackinder presented The Geographical Pivot of History to the Royal Geographical Society.

• His warning: the industrial age and the railway had erased the sea’s monopoly. Land powers could now move armies, goods, and ideas across Eurasia faster than fleets.

• His famous formula: Who rules Eastern Europe commands the Heartland; Who rules the Heartland commands the World-Island; Who rules the World-Island commands the World.

• For the British, and later the Americans, this became strategic gospel.

5. From Empire to Containment

• The United States adopted Mackinder’s logic after 1945.

• National Security documents from 1948 onwards spoke of preventing any single power from dominating the Eurasian landmass.

• America’s answer was to control the maritime periphery ie Europe in the west, Japan and the island chains off China in the east. This is a belt of bases and alliances known as “containment.”

• The logic was simple: keep the Heartland divided: prevent Russia, Germany, or China from uniting.

6. The Eurasian Response

• Russian thinkers such as Savitsky proposed an alternative: cooperation across the continent instead of division from the sea.

• The tragedy of Russia, they said, was pretending to be a Western maritime power. Its natural destiny was continental.

• After the fall of the Soviet Union, Moscow still turned West, hoping for a “Greater Europe.”

• Washington, however, pursued the Wolfowitz Doctrine (1992), declaring that no rival, friend nor foe, should ever rise again in Eurasia. Even allies like Germany or Japan were viewed as potential competitors.

7. America’s Grand Chessboard

• Zbigniew Brzezinski, advisor to several presidents, refined the doctrine in The Grand Chessboard (1997).

• US dominance, he argued, required keeping Eurasian powers divided and dependent on American security.

• Hence the modern alliance blocs: on one side dependent vassals, on the other contained adversaries.

• Russia, weakened, became what Brzezinski called a “geostrategic black hole.” If it resisted, it should be broken into smaller regions.

• Simultaneously, Washington launched its own “Silk Road” projects : pipelines and corridors designed not to unite Eurasia but to sever Central Asia from Russia and China.

8. The Eurasian Turn

• Around 2014, the pattern began to break.

• The coup in Ukraine ended Moscow’s hopes for a shared European order.

• Meanwhile, China lost faith in the US-led global system and launched the Belt and Road Initiative (BRI), a 21st-century Silk Road linking continents by land, sea, and fibre-optic cable.

• Russia, turning east, joined with China in what Mackinder would have called his worst nightmare: two continental giants, side by side, building infrastructure, banks, and trade routes beyond maritime control.

9. Multipolar Eurasia

• The new projects - BRI, the Eurasian Economic Union, the Shanghai Cooperation Organisation, and BRICS - now link much of Asia, West Asia (the Middle East), and parts of Africa.

• The International North-South Transport Corridor connects Russia, Iran, and India. The Northern Sea Route along the Arctic shortens Europe-Asia trade and is outside US naval reach.

• From South Korea to Turkey, nations are aligning around practical cooperation. No one power can impose terms; interests must be harmonised for land powers.

• The logic has shifted from hegemony to multipolarity: shared power, regional balance, pragmatic trade.

10. The Western Dilemma

• The West still clings to the illusion of control.

• Freezing Russian funds, sanctioning Chinese tech, and weaponising finance have only convinced others to seek alternatives.

• The result is self-isolation: the more coercive the system becomes, the faster partners look east.

• What once was an empire of sea routes is becoming "an archipelago of fear".

• Mackinder’s law endures: geography does not care about ideology.

11. A Realist’s Reflection

• I want the West to survive, but survival demands adaptation.

• Our elites cling to narratives that made sense a century ago; today, their arrogance blinds them to a world no longer theirs.

• Multipolarity is not collapse; it’s correction. Yet our refusal to accept it will turn adjustment into breakdown and collapse.

• As Machiavelli warned: Men see things not as they are, but as they wish them to be ... and they are ruined.

12. The Asian Future

• Dostoyevsky wrote: “Russians are as much Asiatic as European... It is time to turn away from ungrateful Europe; our future is in Asia.”

• That line now feels prophetic. The West’s contempt has pushed the centre of gravity eastwards.

• The new Silk Roads - routes, railways, data cables, pipelines - are already remapping the world.

• We are watching the end of five centuries of sea power and the rebirth of the land.

Glossary

• Geopolitics – how geography shapes power and policy.

• Heartland – Mackinder’s core of Eurasia, from Eastern Europe to Siberia.

• World-Island – the joined continents of Eurasia and Africa.

• Multipolarity – distribution of power among several centres.

• Belt and Road Initiative (BRI) – China’s global infrastructure and trade strategy.

• INSTC – International North–South Transport Corridor (Russia-Iran-India).

References

• Halford J. Mackinder, The Geographical Pivot of History (1904).

• Zbigniew Brzezinski, The Grand Chessboard (1997).

• “Defense Planning Guidance” (1992) – Wolfowitz Doctrine.

• US National Security Strategy (1988).

• Official papers on BRI, AIIB, and INSTC (2013–2015).

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WHEN EMPIRES COLLAPSE... WHAT WILL "COLLAPSE" LOOK LIKE

30 October 2025

This is what collapse looks like:

Institutions stop functioning, governments lose authority and break their own as well as international rules
Currencies lose value, savings evaporate, at first there is a rush for the dollar and then it is abandoned, hard assets and necessities keep pace with inflation, trade freezes up
Elites turn on each other, Pinky and Perky become Punch and Judy, from consensus to chaos, while the public can only think "survival"
Infrastructure decays, borders blur, society fragments, the military fractures.

What we have is a dominant centre (the U.S./ West, maritime) that builds globalisation, then overspends and overextends, and now faces rival powers (China, continental) and structural fatigue. 

The next crisis won’t be just economic this time... it will reflect a systemic shift to a multi-nodal global order, a moment where the US empire no longer holds the levers of power it once did.... and has shown no signs of being able to adapt to this kind of Order (they won't listen, they send in the military; where common sense suggests they should negotiate a losing hand).

The signs are with us. The collapse isn’t far, it’s set up already.... we have a sequence but no clear timeline. For sure, it won’t all fail at once, it'll unravel piece by piece, until a normal, stable and surprise-free life becomes a distant memory.... then there will be a recalibration and New Order of some sort.

Here is a five-stage sequence of collapse, with brief examples illustrating each step.

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1. Fiscal Overstretch - Living Beyond Means

• Empires spend more than they earn — on welfare, wars, and vanity projects.
• Example: Late-stage Rome debased its coinage to fund armies; the U.S. will incur a $2 trillion deficit this year.

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2. Market Rebellion - The Bond Revolt

• Investors lose confidence and demand higher interest to lend. Debt servicing balloons; new borrowing pays off old debt ("debt monetisation" aka a Ponzi scheme).
• Example: The U.K.’s 2022 gilt crisis forced the Bank of England to step in; Italy in 2011 nearly went insolvent on rising yields.

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3. Currency Erosion - Printing and Panic

• Central banks print to cover deficits. Inflation eats savings, capital flees, gold and hard assets soar.
• Example: Weimar Germany 1923; more mildly, the post-Covid surge of U.S. money supply that fuelled asset inflation.

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4. Social Fracture - The Revolt of the Debtors

• Prices rise, wages stagnate in real terms, services collapse. Trust in elites erodes; protests and populists fill the streets.
• Example: France’s gilets jaunes; U.S. polarisation and street unrest; collapsing faith in parliaments (in democracy) across Europe.

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5. Institutional Breakdown - From Gridlock to Chaos

• Governments turn inward, bureaucracy freezes, corruption explodes, freedoms are restricted and the military or regions assert autonomy.
• Example: Late-Soviet paralysis in the 1980s; Washington gridlock and politicised justice today; failing states in West Asia from Lebanon to Libya; France's five Prime Ministers (5, sic) since 2022.

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Summary
Collapse starts slowly in the bond markets, moves through money, and ends in public rebellion. Collapse is when people stop believing the system can fix itself.
That’s how empires die, that's how this Empire will die: first financially, then socially, then spiritually.

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END-STAGE EMPIRES ARE RUN BY THEIR BANKERS

29 October 2025

Bessent steps in to protect profits of friendly investors.

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FINANCIAL RESCUE AS IMPERIAL OVERREACH

The strange case of an American Treasury Secretary covering massive hedge fund losses with public money.

Bessent, Argentina, and the American Taxpayer.

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1. Story – The Bailout Nobody Asked For

Scott Bessent, U.S. Treasury Secretary and long-time Wall Street insider, has brokered a US$20 billion rescue swap with Argentina.
Officially, it’s designed to stabilise a struggling emerging-market partner.
In practice, it protects U.S. hedge funds - notably BlackRock, Pimco and Fidelity - from heavy losses on their Argentine bond positions.

Bessent’s history with these hedge funds goes back decades. Many now see this as a bailout for his old financial friends, not a policy in the interests of the American taxpayer, who shoulders the inflationary and fiscal costs.
Argentina’s inflation, at over 250%, and its looming debt repayments make this a highly risky commitment of U.S. backing.
(Buenos Aires Times source)

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2. Context – Empire’s Financial Reflex

This episode illustrates a deeper trend in late-stage empire economics:
- The financial and political centres of power have fused
- Wall Street gambles abroad, and when those gambles fail, Washington steps in.

Rather than allowing markets to clear the mess themselves, the imperial centre props up its own capital class, diverting public money away from domestic renewal.
This is not new — it is a recurring pattern in end-of-empire histories.
The centre protects capital flows outward, while the periphery remains indebted and dependent.

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3. The Moral Hazard Machine

Such rescues create what economists call moral hazard:
- investors take reckless risks knowing they’ll be saved

- taxpayers face austerity measures (cuts in services) and/ or tax rises, to cover bailouts.

The results are predictable:

• Resource diversion - tax and Treasury support flow to global finance, not to Main Street

• Accountability collapse - bailouts happen and the press gives out diplomatically worded cover stories (aka propaganda) to keep us on board
• Erosion of legitimacy - meanwhile, ordinary citizens are not stupid and know very well when elite speculation has gone wrong.

How is it possible to reform a financial system when the stability depends on shielding the same insiders who caused the instability in the first place? ... reform becomes impossible.

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4. End-of-Empire Paradigm

Historically, empires in decline exhibit three common traits:

1. Finance captures the state - public institutions serve private capital
2. Financial overreach - production is outsourced to vassal states, but instead of profits being reinvested into (real) resources and further productive capacity, they are put into financial (paper) assets like treasury bonds and stock markets and property 
3. Legitimacy loss - citizens sense the rules no longer apply equally - asset prices inflate for the rich, while High Street prices inflate for the remaining 95+%.

Bessent’s Argentina deal shows an imperial centre spending its dwindling credibility to protect its own network ie a short-term fix that further deepens long-term fragility.

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5. Outlook - When Empires Become Credit Lines

This is what happens when finance replaces industry as the core of power. The global trade reserve status of the dollar gives America and its financial class immense power as we see in this case, but is also the cause of its undoing.
An empire once built on production and innovation now survives by extending credit (printing)  to others and to itself - it monetises its debt ie borrows more and more at the short end and prints money to cover the mounting interest payments and debt rollover repayments.

Such cycles always end the same way:
the financial core overextends, confidence and trust erodes, the bailouts become bigger, the taxpayers angrier, the legitimacy thinner, until the system collapses under its own weight.

What does "collapse" look like?

At each deal like this one, policy-makers push the can a little further down the road, saving the system temporarily... but only for themselves.

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References
• Buenos Aires Times, “Bessent steps in to protect profits of friendly investors in Argentina” (Oct 2025)
• Ray Dalio, Principles for Dealing with the Changing World Order (2021)
• Paul Kennedy, The Rise and Fall of the Great Powers (1987)

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When Empires Bail Out Their Financiers, short term stability leads to chronic fragility.

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HOW THE FOURTH TURNING WILL PAN OUT

27 October 2026

See the post describing Collapse

https://www.theguardian.com/us-news/2025/oct/25/trump-tariffs-canada-ronald-reagan

You really cant make this stuff up. Strategic planning? Bring back Ronald Reagan! And he told the best jokes.

Indeed you cannot make this stuff up and it's the delusional character of Western thinking....but where does this come from?

If you've read Mackinder, you'll see why being the global hegemon is so because you answer to no one unlike everyone else who answers to you and this power means you set the rules for others to follow rules which work to your advantage.

But in this piece we will consider that this single-minded obsession with hegemony, globalisation and free money (from the dollar's reserve status) is delusional because illusory and unsustainable ie unreal and unstable. Reality is real efforts not a financial reality is gold rather than fiat currency. So the idea of investing is to build up real assets rather than paper.

What is going to change over time, is that these hegemonic ideas will come to be seen by most people as delusional and reckless as the real idea is to build up your physical assets because paper financial fiat assets do not last. Consider the following:

- If Russia is a threat, balance of power and security arrangements and cooperation over global issues are the best way to deal with it, not through expansionism

- you cannot just barge into countries and steal the resources 

- people will lend you money if they can be assured that it won't be devalued and it will be repaid in full

- success comes from innovation, production and export - not from borrowing and consumption

- investors will move from speculation back to production and essentials (energy, food, defence)

- diplomacy and cooperation will trump military and conflict

- a successful economy is the start and so Western Europe must join up with Russia for its resources and china for its technology and get market share

- the people are the final arbiters and they want stability protection and prosperity - PEACE - they are not interested in ideology gambling and war

- those who want local and sovereign will triumph over those who want global and authoritarian

- I do think equality will prevail over apartheid, and genocide will send a state to hell (literally to hell, to Armageddon, as genocide is suicide and sends a state and its people to hell).

From what I've read and understood over the last two or three years, this is what I think is going to happen - this prognosis is basically all those debt cycles and End-of-Empire stories retold in a Fourth Turning kind of way.

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RAY DALIO ON THE EMPIRE BIG CYCLE

27 October 2025

Ray Dalio – The Big Cycle of Empires

1. Rise through Productivity & Education

A nation invests in education, innovation, and discipline. Productivity rises faster than debt, creating prosperity and competitiveness.

2. Trade Expansion & Global Influence

Exports grow, the currency strengthens, and the country becomes a financial and trading hub. The world trusts its currency and governance.

3. Financialisation & Debt Growth

Wealth shifts from industry to finance. Easy credit fuels asset booms. Debt outpaces productivity. Inequality rises.

NOTE: As production and jobs move offshore to cheaper colonies, profits flow back to the imperial centre as the safest place to store them with the best remuneration this is done by buying US treasures, in this case.

So instead of being reinvested in industry, these profits are parked in financial assets - stocks, bonds, and good property - because the reserve-currency economy is seen as safest and most profitable.

The result is rising debt, inflated asset prices, and a hollowed-out real economy - a switch from a production to a consumption economy where the Metropole lived on debt borrowed from global production economies.... this is obviously unsustainable in the long run: you cannot live forever on debt.

4. Loss of Competitiveness

Labour and production costs climb. Foreign competitors catch up. The empire consumes more than it produces.

5. Internal Conflict & Populism

The wealth gap widens, trust in institutions erodes. Society polarises into rich vs poor, left vs right, insider vs outsider.

6. External Conflict & Overreach

To sustain its dominance, the empire extends militarily or financially. Rival powers challenge it. Wars hot or cold drain resources.

7. Decline & Reset

Excess debt, currency debasement, and social unrest culminate in crisis. Defaults, regime change, or restructuring follow.

The cycle restarts as new, more disciplined powers rise from the periphery.

Source: Ray Dalio, “Principles for Dealing with the Changing World Order”, 2021.

AI generated

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4. GOLD, THE DOLLAR, THESE FOREVER WARS AND GOLD'S FLASH CRASH

23 October 2025

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GOLD, THE DOLLAR, AND THESE FOREVER WARS

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1. The Dollar Trap

It might seem utterly foolish for Russian companies such as oil giants Rosneft and Lukoil to leave assets in US dollar accounts, given the near-certainty of eventual confiscation.
But what choice did they have? The dollar remains the central clearing currency for global trade, especially in oil, shipping, insurance, and large-scale long-dated commodity contracts. To pull out would assure legal actions, fines...

Even when nations want to diversify, the reality is that the dollar’s network effect is overwhelming. It underpins the international payments system (SWIFT), and most trade finance is still denominated in USD. Cutting oneself off from the dollar is near impossible. 

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2. Gold's Flash Crash

Gold fell sharply last Thursday and again on Tuesday (today is Thursday 23 Oct 2025).
Analysts cited “easing trade tensions” between the US and as the US moved to compromise over the export of refined rare Earths from China) and speculation that the Federal Reserve might have to delay further rate cuts - both factors said to have strengthened the dollar, its relative strength.

But when we look at the data, the DXY (Dixie, the Dollar Index) barely moved - roughly from 98.8 to 99.0. This is hardly a “strong dollar rally.”
It raises a fair question: are markets being "over-interpreted" to fit policy-friendly narratives? Ie, are we getting propaganda even in our macroeconomic data? Is the significance of these forever wars being obscured?

The timing of these moves over the last week suggests something else.
Gold’s decline coincided with rumours of progress towards peace in Ukraine: fewer geopolitical shocks tend to depress safe-haven assets.
Then, when Washington sanctioned Rosneft and Lukoil, gold rebounded.
That makes sense: sanctions restrict oil supply, drive up prices, slow global trade, and threaten growth, which create exactly the conditions under which investors hedge with gold.

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3. Central Banks Keep Buying

Step back and look at the long-term trend.
Central banks, especially in Asia, the Middle East, and emerging markets, have been accumulating gold steadily for two decades.
They buy as part of a de-dollarisation strategy, exchanging printed local currency for physical metal that can’t be frozen or sanctioned. And now selling out of U.S treasuries or at least not investing in in order to obtain dollars and with these by gold.

According to the World Gold Council (2024), central banks added over 1,000 tonnes to their reserves in just two years — the largest accumulation since records began.
China, India, Turkey, and Poland have been the leading buyers. Remember that since 1971 the US dollar as not been backed by anything other than a promise from the US treasury. 

The logic is simple: monetisation of debt by printing expands the money supply while the supply of physical assets remains constant, causing inflation ie reducing the purchasing power of a fiat currency.

• Inflation erodes fiat money.
• Gold protects purchasing power.
• Plus, in an era of dollar weaponisation, gold is one of the few assets that is truly sovereign.

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4. The Investment Gap

Ray Dalio (Bridgewater Associates) and strategists at J.P. Morgan recommend holding 15–25 % of total assets in gold as “wealth insurance.”
Yet institutional portfolios such as pension funds today hold less than 1 % of their assets in gold. Retail investors hold even less.

If institutions were to rebalance towards that 15 % level, it would represent a massive structural demand shock ...a tide of capital that could propel gold prices way beyond their current levels.

Gold is not only a store of value but also a reserve asset for trade ie a settlement medium between central banks.
In other words, it operates as a form of real money, even in a fiat world. "Gold is money, all the rest is credit", said J P Morgan himself back in 1912!

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5. The Real Risks

For private investors, the question is not whether gold’s price will fluctuate - it surely will. It’s about sovereign risk (the risk of a state breaking its promise to repay by defaulting on its debt, freezing assets, imposing capital controls, or otherwise preventing investors from getting their money back):

• Will governments impose capital gains or sales taxes on gold transactions?
• Could they impose capital controls on moving bullion across borders?
• Could “anti-hoarding” or “windfall” taxes appear under the pretext of financial stability?

The danger isn’t in gold’s volatility — it’s in the system’s desperation for revenue.
When the debt burden grows too large to service, governments look for assets to confiscate or revalue.

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6. The Takeaway

Gold remains the last refuge for those seeking no counterparty risk (the risk a bank, broker, or borrower will fail to meet their obligation) ie seeking a physical asset whose supply is limited and whose value cannot be "conjured" by printing presses.
Gold is in effect an anchor of trust in a world of promises.

As debt-to-GDP ratios soar, and money supply expands at “eye-watering” speed, currently:

U.S. GDP: ≈ $30 trillion

U.S. National Debt: ≈ $38 trillion

Debt-to-GDP ratio: ≈ 124 %.

The logic of holding gold grows clearer - there's no way that dirt is ever going to be repaid in full unless inflation can burn it away ie inflation about interest rates over many years indeed decades... but who would continue to invest in U.S treasuries?) or the system will fracture under its own weight. A structure - political, economic, or social - becomes so large, complex, and unsustainable that it collapses from internal pressure, not from outside attack, ie costs, contradictions or inefficiencies grow faster than the system's ability to manage them - debt, inequality, bureaucracy, or corruption grow faster than productivity and trust, so the system eventually implodes from within.

It breaks down naturally, like an overloaded bridge snapping.

Fiscal Dominance and Overstretch

The state’s debt burden grows faster than the tax base.

Interest payments consume a rising share of govt revenue.

Governments start to monetise the debt (print or issue short-term paper to fund themselves).

Investors lose confidence → rising bond yields → even higher borrowing costs → ... a vicious spiral.

In either case, those holding tangible, finite assets will sleep better!

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References:

• World Gold Council (2024) – Central Bank Gold Reserves Data
• Ray Dalio, Principles for Dealing with the Changing World Order (2021)
• J.P. Morgan Private Bank, 2025 Outlook: Real Assets for a Real World
• YouTube: The Gold Story – Explaining the Numbers

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Why Central Banks Keep Buying Gold

(This graphic shows the flows, incentives, and price linkages.)

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1. WHAT IS ASEAN

1. WHAT IS ASEAN

Tag these articles: SEATMS

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20 October 2025

1. What is ASEAN

ASEAN stands for Association of Southeast Asian Nations.
It was founded in 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand to promote peace, stability, and prosperity in Southeast Asia.
Today it includes 10 member countries, with Timor-Leste preparing to join as the 11th.

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2. The Members

Indonesia
Malaysia
Philippines
Singapore
Thailand
Brunei
Vietnam
Laos
Myanmar
Cambodia

(Timor-Leste - observer, expected to become full member soon.)

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3. Why It Was Created

ASEAN was born in the Cold War era, when Southeast Asia was unstable and divided.
The founders wanted to prevent regional conflict, boost trade, and create a sense of unity.
It was also a way to keep outside powers - the US, China, and the Soviet Union - from dominating regional affairs.

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4. How ASEAN Works

Decisions are made by consensus, meaning every member must agree.
The ASEAN Secretariat is based in Jakarta, Indonesia.
Annual Summits bring together leaders and partners such as China, Japan, the United States, and the European Union.
It operates through three main pillars: Economic, Political-Security, and Socio-Cultural.

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5. Main Achievements

ASEAN Free Trade Area (AFTA) reduced tariffs and boosted regional trade.
The ASEAN Community (2015) encouraged closer economic and political integration.
The ASEAN Regional Forum (ARF) provides a platform for security dialogue.
Visa-free travel agreements among several members have encouraged tourism and mobility.

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6. Ongoing Challenges

Economic gaps remain wide between richer states (Singapore, Malaysia) and poorer ones (Laos, Myanmar).
Human rights and democracy issues persist, especially in Myanmar.
The consensus model slows decision-making in times of crisis.
The region faces pressure from both China and the United States, each seeking influence.

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7. Summary

ASEAN is Southeast Asia’s family of nations – a community built on peace, cooperation, and regional identity.
It has prevented wars and encouraged trade, but its slow, cautious style limits its global impact.

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Glossary

Consensus – all members must agree before taking action.
Integration – combining economies or policies to work as one.
Regional forum – a meeting space for countries to discuss shared issues.
Bloc – a group of countries acting together politically or economically.

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TO MAKE AMERICA GREAT AGAIN

18 Ocrober 2025

"What's happening" looks the same for all end-stage empires.

You can tell when an empire is in decline - it forgets, or loses confidence in, its own culture and values.

It forgets what once made it great and instead pursues expansion, hegemony, and imposing its forgotten values on others rather than living them itself.

It’s a shame.

“Make America Great Again” should mean America remembering and living again its values. It's values that are the bedrock of a culture.

When we think of America as she used to be, before the endless wars, the Dulles brothers, the labyrinthine neocon deep state, we think of what The Judge captured in that gaudy opening countdown of his:

freedom to make one’s own future, free from too much state interference. Compare that with China’s idea of community and conformity.

We think of “all men are created equal". How does that square with the Epstein list or tax avoidance for corporates and billionaires?

We think of the frontier spirit: tough people relying on themselves, driving westward in search of better lives for their families. But what does that mean today, to those living in caravan parks or numbed out on fentanyl?

People once ran to America. Now, they run away from it. What’s needed is a spiritual cleansing, a return to the faith that freedom, equality and self-reliance, not domination, are what make a nation great.

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3. PORTFOLIO STRATEGY THREE GOLD ETFs FOR THE DOLLAR ENDGAME

Portfolio Strategy: Three Gold ETFs for the Dollar Endgame

1. Two-Phase Dollar Cycle

2. Relative Performance (Phase 1) - clean line chart comparing SGLN, AUCP, GDXJ under a “Dollar Crunch” (DXY↑, liquidity↓).

3. Gold Sensitivities (Phase 2) - bar chart showing approximate leverage to gold (SGLN 1×, AUCP 1.5×, GDXJ 2.5–3×).

4. ATR-Based Trailing Stop - simple visual of price vs trailing stop band.

5. Portfolio Allocation - pie or stacked bar showing 40 / 40 / 20 split and respective roles.

Framework and Rationale

This section examines how a gold-weighted portfolio might behave across two distinct phases of the dollar cycle.

Phase 1 represents a dollar liquidity squeeze; Phase 2 represents a loss of confidence in fiat money.

The focus is on three London-listed ETFs: SGLN (iShares Physical Gold), AUCP (L&G Gold Mining), and GDXJ (VanEck Junior Gold Miners UCITS).

Each vehicle captures a different layer of exposure — physical metal, senior producers, and high-beta junior miners.

(Insert – “Two-Phase Dollar Cycle: Dollar Crunch → Dollar Break”)

Phase 1 – Dollar Strength and Liquidity Tightening

In this phase, real yields rise and the dollar index (DXY) strengthens.

Liquidity leaves emerging markets and speculative equities, creating risk aversion.

The key mechanism is forced de-leveraging: investors sell what they can, not necessarily what they should, in order to pay their debts.

SGLN tends to remain resilient.  Gold is sold for cash but simultaneously benefits from safe-haven flows and, in sterling terms, from a weaker pound.  The ETF’s low tracking error and physical backing make it an effective capital-preservation tool.

AUCP declines moderately.  Large producers suffer from falling sentiment and, to a lesser degree, lower short-term bullion prices, but their positive cash flow and dividend yield absorb part of the shock.

GDXJ reacts sharply.  Juniors are sensitive to financing conditions; they often fall two or three times more than gold itself.  A 15–25 per cent correction is typical during risk-off episodes.

Relative performance of SGLN, AUCP and GDXJ during dollar-strength periods

Practical note: investors should treat such drawdowns as accumulation opportunities rather than reasons to exit.

Position sizes can be scaled gradually when RSI falls below 40 and volume contracts, indicating capitulation rather than fundamental weakness.

Phase 2 – Dollar Weakness and Monetary Repricing

This phase begins when markets conclude that the Federal Reserve has lost control of real yields.

Fiscal deficits widen, policy credibility erodes, and inflation expectations re-anchor higher.

The narrative shifts from “tight money” to “unpayable debt.”

SGLN becomes the portfolio’s anchor.  As central-bank demand rises, the ETF’s price tends to advance broadly in line with bullion.  Gains of 50–100 per cent are historically consistent with similar monetary resets.

AUCP benefits from margin expansion: producers’ revenues follow bullion while their costs (energy, labour, reagents) adjust more slowly.  Leverage to the gold price is roughly 1.5×, with dividends maintaining investor confidence.

GDXJ becomes the high-beta sleeve.  Smaller miners experience operational leverage; historical analogues suggest potential 3–5× moves once gold establishes a new base above previous highs.

(Insert – “Estimated sensitivities of SGLN, AUCP and GDXJ to bullion price changes”)

Trade Management and Exit Discipline

The challenge in this environment is not identifying the trend but managing exposure as volatility expands.

ATR (Average True Range) provides a practical way to frame trailing exits without being prematurely stopped out.

1. During consolidation: use the 14-day ATR to estimate expected daily range.  For example, if ATR = 2.5 USD, a normal fluctuation is ±2.5 USD around recent closes.

2. During the breakout: allow a wider tolerance — roughly one ATR below the weekly closing high.  This converts ATR from a defensive stop into a trailing exit that locks in profits while respecting trend volatility.

3. When volatility contracts after a spike: reduce position size or rebalance into SGLN to maintain portfolio stability.

(Insert placeholder: small technical diagram – “ATR-based trailing stop illustrated on GDXJ weekly chart”)

Position Weighting

A practical distribution reflecting both protection and asymmetry could be:

ETF Exposure Type Typical Beta to Gold Suggested Weight Role

SGLN Physical bullion 1.0 40 % Core hedge and liquidity reserve

AUCP Senior producers 1.5 40 % Income and steady participation

GDXJ Junior miners 2.5–3.0 20 % High-beta growth sleeve

(Insert placeholder: infographic – “Sample portfolio allocation across gold tiers”)

Assumptions

Liquidity cycles drive performance differences more than simple bullion moves.

ATR and moving averages are practical, objective tools for risk control.

The long-term value of miners derives from cash flow sensitivity to gold, not short-term sentiment.

Diversifying across the gold-exposure ladder (metal → majors → juniors) allows participation through both deflationary and inflationary phases of the dollar cycle.

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1. GOLD, EQUITIES AND THE ENDGAME OF A TRASHED CURRENCY

13 October 2025

Gold, Equities and the Endgame of a Trashed Currency

When money weakens, asset prices soar - at first at least. But the illusion of wealth soon gives way to the reality of devaluation. This is the story of how currencies collapse, why gold endures, and how you, dear readers as investors, might navigate the transition.

Money Printing

It is well explained here, offset 15'

1. The Dollar’s Fragile Supremacy

When a currency weakens, the first thing investors notice is that everything priced in it seems to rise. “Appears to”. Gold, oil, and shares all appear to surge in value. But this is largely an illusion. Their nominal price climbs because the measuring stick - the currency itself - is shrinking. You have to understand that the money in your pocket doesn’t go as far as it used to because there is more of it in circulation - more money chasing the same supply of goods => inflation. Real assets and notably gold are unchanged in value (in usefulness), it’s just that to buy them you need more and more of a collapsing currency. 

So the early phase of a currency decline is seductive. It feels like a boom. Asset prices climb, optimism abounds, and governments convince themselves the problem is under control. In reality, it’s the first act of a slow-moving tragedy.

2. The Flight to Hard Assets

As faith in money falters, investors turn instinctively towards what is real and finite. Gold and silver rise first. Commodities follow. Real estate attracts capital too, because it is tangible and usable. These are the classic havens in times of monetary excess. Property owners can be well pleased. During the last great inflationary decade, from 1971 to 1980, gold outperformed equities by a factor of 10 - ten! This is the essence of the flight to hard assets: the search for value that cannot be printed.

Currency Erosion

3. Equities in Nominal Boom, Real Decline

Equities can appear to thrive in an inflationary world, but the reality is less kind. Companies raise prices to match inflation, but input costs rise even faster. Energy, labour, and debt all become more expensive. But watch out - profits shrink in real terms.The result is an inflationary bull market - one that looks spectacular on paper but quietly erodes purchasing power. The chart goes up, yet the investor “mysteriously” grows poorer.

4. Gold Miners and the Leverage Trap

Gold miners offer extreme leverage to gold’s price movements. When gold rises faster than mining costs, profits soar. But when inflation spreads into fuel, wages, and equipment, the advantage vanishes. Late-stage inflation often squeezes miners hardest - especially the smaller juniors. A big part of costs is energy so if oil dips then junior miners rise .This is why ETFs like VanEck Junior Gold Miners (GDXJ) swing so wildly: they are turbocharged plays on both gold and confidence.

Loss of Control - Dollar Devalues

5. The Loss of Control

Eventually, inflation becomes chaos. Bonds collapse as yields rise uncontrollably. Governments respond with price controls or capital restrictions. Markets lose faith in policy itself.This is the next phase - the loss of control - when gold ceases to be an investment and reverts to what it always was: money. Equities, once buoyed by cheap printed liquidity, deflate both nominally and in real terms. The public, sensing betrayal, retreats from all paper promises.

6. The Dollar’s Paradox

The dollar remains a special case. It is both the world’s problem and its refuge. When crises erupt, capital still runs to it - the “scramble for dollars". Yet this safety is temporary. If confidence in US fiscal discipline breaks, there will be no replacement large enough to absorb the shock.

The Great Reset

The next rotation will be into gold, commodities, and perhaps a few disciplined currencies such as the Swiss franc or Singapore dollar. Analysts are already calling this “the post-dollar rotation”.

7. Recap: The Phases of a Currency’s Decline

(1) First comes monetary expansion, when printing presses hum and markets cheer.

(2) Next, currency erosion, when inflation bites and investors seek shelter.

(3) Then, loss of control, when policy fails and faith collapses.

(4) Finally, the reset, when a new measure of value emerges.

Gold survives every reset because it is not anyone’s liability. Fiat currencies depend on promises ... and promises are the first casualty of panic.

8. Gold and Equities in the Endgame

In the early stages of devaluation, both gold and equities rise together. Later, gold continues upward while equities stagnate. Finally, as trust in paper disintegrates, gold becomes the numeraire ie the yardstick by which all else is measured. This is why serious investors still see gold as the foundation of wealth, a yard stick and they store of wealth, not a mere trade.

9. The Modern Parallel

Today’s conditions are eerily familiar: soaring deficits, massive liquidity, and record asset prices. Real yields wobble. The Fed’s balance sheet is swollen. Debt-to-GDP ratios have entered uncharted territory.It is the same old pattern, only on a global scale. The illusion of wealth persists, but the repricing of reality is already underway.

10. What could derail the trend?

Gold - at October 2025 - looks technically overbought in the short term but remains in a structural uptrend. The last great bull run in the 1970s only ended when two conditions appeared together: belief that the Fed had conquered inflation and real GDP growth running twice its long-term average. Neither condition applies today. If anything, industrial commodities like copper and oil hint at weakness, while the Fed’s recent rate cuts show tolerance for higher inflation. Trade frictions between the US and China reinforce a stagflationary backdrop – historically positive for gold.

11. The 1970s Playbook

Is history a guide? Some people think so.

From 1973 to 1983, gold rose fivefold while the S&P 500 gained just 50%. Four stagflationary episodes saw inflation peaking in 1970, 1974, 1980 and 1982. Gold typically rallied into recessions, dipped 19% after the first rate hike, then recovered within months. Bull runs broke only when GDP soared above 4-5% in post-recession booms – conditions absent today.

When to step in and out of gold?

12. Valuation Upside

1. Buy the dips - use technical measures RSI, ADX, Volume, moving averages, momentum

2. Watch miners' margins - use fundamentals spot - AISC

3. Get out when (more likely "if") gold's refuge value falls - use macro indicators: inflation mastered, growth returns, fiscal crisis over. 

Miners' operating leverage

Gold-mining equities have operating leverage to the gold price. You can see that if you compare the share price of the ETF SGLN with the miners GDXJ and AUCP.  Gold has risen ~30% in the last three months, these senior and junior miners ~60%.

When gold rises faster than miners' input costs, margins explode. Even using a conservative $3,900/oz gold price (spot < futures), gold-mining equities appear undervalued (sic) by around 60%. Shares today imply a $3,000 gold price - this is about 25% below spot - and developers could gain materially more as projects de-risk (ie  gap between costs and price of gold widens further). 

Under one blue-sky scenario of $17,000 gold within five years, valuations of miners could rise over 600%, with multiples expanding as the bull market strengthens.

Example:

All-in sustaining cost (AISC): $1,300–1,600 per oz

Cash cost: $1,000–1,200 per oz

Break-even: $1,400–1,500 per oz

When gold trades above $2,400 per oz, margins can double or triple, explaining the strong performance of ETFs such as GDXJ.

Input Costs

But if AISC begin to rise faster than gold in dollar terms, margins - and share prices - could tumble:

12. Closing Reflection

Gold remains the clearest long-term hedge against monetary excess, fiscal instability and rising geopolitical threats. The short-term pullbacks are buy-the-dip opportunities within a structural uptrend supported by policy, politics and history. The Miners have operating leverage and rise faster ... although beware if miners' costs start to inflate faster than the price of gold in dollar terms.

If a currency can be trashed, it can also be rebuilt. But rebuilding requires trust and this is something that cannot be printed or borrowed. Gold, indifferent to politics and policy, endures through each cycle of human "error". That is its unquestionable and unanswerable strength.

© 2025 Living in the Air - Essay adapted from discussions on global macroeconomics and the future of money.

NEXT Three GOLD ETFs worth considering

Glossary

Nominal Price

The face value of a good or asset, expressed in current money terms and not adjusted for inflation. A rise in nominal price may simply reflect a fall in the currency’s purchasing power rather than a true increase in value.

Real Assets

Tangible things that have intrinsic worth because they are useful, such as property, commodities, and infrastructure - as opposed to financial claims or paper instruments. The value of real assets tends to hold up when currencies weaken - hence the illusion that they are going up in price... but no not at all: real assets are holding their value while the currency gets debased meaning you need more of it to buy the same quantity of real asset.

Hard Assets

A subset of real assets that are physically finite and durable: gold, silver, oil, and land. They act as stores of value during monetary instability.

Monetary Excess

A condition where the supply of money expands faster than the growth of goods and services, leading to inflation and speculation.

Bull Market

A sustained period of rising asset prices, often fuelled by optimism, liquidity, or loose monetary policy. Bull markets can exist in both nominal and inflation-adjusted terms.

Purchasing Power

The amount of goods and services that one unit of currency can buy. It declines as prices rise — hence inflation erodes purchasing power.

Price Controls

Government-imposed limits on the prices of goods or services, used to curb inflation. Historically they distort supply and lead to shortages or black markets.

Capital Restrictions

Regulations that limit the movement of money across borders - for example, taxes on foreign exchange or limits on withdrawing funds. Capital restrictions are usually introduced in times of financial crisis to protect a currency.... beware!

Policy (Fed Policy)

The set of actions taken by the US Federal Reserve to influence economic activity on employment and inflation. These are mainly through setting interest rates, controlling the money supply, and managing the size of its balance sheet. Interest rates are very important to a stable economic system, including the government's ability to pay the interest on its debt.

Nominal and Real Terms

“Nominal” refers to figures measured in current prices; “real” means adjusted for inflation. For example, wages may rise 5 % nominally but fall in real terms if inflation is higher.

Paper Promises

A figurative expression for financial assets - shares, bonds, and bank deposits - that depend on the issuer’s solvency and trustworthiness, unlike gold or land which have intrinsic value.

Fiscal Discipline

The ability of a government to control its spending and borrowing. Weak fiscal discipline - large, persistent deficits - undermines confidence in a currency.

Numeraire

An economic term meaning the standard by which value is measured. In stable times the numeraire is the national currency; in crises, gold often resumes that role.

Real Yields

The return on bonds after adjusting for inflation. When real yields fall or turn negative, non-yielding assets like gold become more attractive.

Fed’s Balance Sheet

A record of all assets and liabilities held by the Federal Reserve. It expands when the Fed buys securities or injects liquidity into the banking system - a process known as quantitative easing.

Debt-to-GDP Ratios

A measure of a country’s indebtedness, comparing total government debt to annual national output. High ratios signal that debt growth is outpacing economic growth, raising default and inflation risks.

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